Department of Numbers

Reading, Pennsylvania Home Affordability

The data below measures home affordability for the Reading, Pennsylvania metropolitan area using price-to-income and price-to-rent metrics.1 The maximum affordable loan amount for the median household income is also calculated. You can also compare Reading home affordability to other cities.

Reading, Pennsylvania Home Price-to-Income Ratios

The current price-to-income ratio for Reading is 2.65 as determined by March 2013 Realtor median sales prices. The second chart shows a history of the ratio as an index calculated from the Federal Housing Finance Agency's Reading HPI series. Median household income data for Reading is from the Census American Community Survey.

Price-to-Income Dollar Ratio: Realtor

Price-to-Income Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Reading, Pennsylvania Home Price-to-Income Ratio History

Date Realtor
(Dollar Ratio) 		FHFA
(Index Ratio)
March 2013 2.65 —
December 2012 2.79 123.8
September 2012 2.79 124.8
June 2012 2.79 124.2
March 2012 2.79 124.7
December 2011 2.74 125.9
September 2011 2.74 127.3
June 2011 2.74 128.6
March 2011 2.74 129.3

Reading, Pennsylvania Home Price-to-Rent Ratios

The current adjusted price-to-rent ratio for Reading is 16.36 as determined by March 2013 Realtor median sales prices. This ratio is calculated using household size adjusted median contract rent for Reading. The chart below shows an index of the rent ratio calculated from the metro FHFA HPI series and the Reading median contract rent data from the Census ACS.

Price-to-Rent Dollar Ratio: Realtor, Realtor Adjusted Rent

Price-to-Rent Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Reading, Pennsylvania Home Price-to-Rent Ratio History

Date Realtor
(Dollar Ratio) 		Realtor Adjusted
(Dollar Ratio) 		FHFA
(Index Ratio)
March 2013 17.99 16.36 —
December 2012 18.98 17.26 104.9
September 2012 18.98 17.26 105.6
June 2012 18.98 17.26 105.2
March 2012 18.98 17.26 105.5
December 2011 18.60 16.91 106.6
September 2011 18.60 16.91 107.8
June 2011 18.60 16.91 108.9
March 2011 18.60 16.91 109.5

Reading, Pennsylvania Home Rent-to-Mortgage Payment Ratio

The rent-to-mortgage payment ratio uses the adjusted rent for Reading against a 100% loan-to-value mortgage (30-year fixed) for the median price home using Realtor home sales statistics. It's a lot like a cap rate, but I find it more appealing in ratio form. A ratio of 1.0 means that annual rent is equivalent annual mortgage payments. Values less than 1.0 indicate rents are cheaper and values greater than 1.0 mean mortgage payments are cheaper. Beware, taxes are not considered here. The rent-to-mortgage payment ratio for Reading was 1.12 in March 2013.

Rent-to-Mortgage Payment Dollar Ratio: Realtor

Reading, Pennsylvania Home Rent-to-Mortgage Payment Ratio History

Date Realtor Adjusted Rent
(Dollar Ratio)
March 2013 1.12
December 2012 1.10
September 2012 1.08
June 2012 1.05
March 2012 1.02
December 2011 1.04
September 2011 1.02
June 2011 0.97
March 2011 0.93

Reading, Pennsylvania Inferred Affordable Mortgage

The inferred affordable mortgage value is determined by taking the median household income for Reading, Pennsylvania and calculating the mortgage 30% of that income could afford. Traditionally, 30% of income is the maximum amount a homeowner could use towards a home loan. Inferred affordable loan values are calculated from ACS median household income and average monthly mortgage rates.

Inferred Affordable Mortgage

Reading, Pennsylvania Inferred Affordable Mortgage History

Date Inferred Mortgage
January 2013 $294,497
December 2012 $296,717
November 2012 $296,717
October 2012 $295,604
September 2012 $291,212
August 2012 $287,625
July 2012 $289,410
June 2012 $284,801
May 2012 $280,642
April 2012 $276,908
March 2012 $275,568
February 2012 $277,581
January 2012 $276,572

1. Specifically, home prices are from the non seasonally adjusted FHFA all-transactions quarterly series. Dollar ratios are calculated using NAR metro prices when available. Rent and income data are from the Census ACS and are carried forward into the following year prior to release of the new data. ↩

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