The Median multiple or Median house price to income ratio is a housing indicator used to indicate the affordability of housing in any given community.[1] The Median house price to income ratio WAS the primary indicator H1 of the 1991 World Bank/UNCHS Housing Indicator system.[2] [3] It was subsequently used as a measure of affordability by the UN Commission for Sustainable Development, the National Association of Realtors, State of the Environment 2003 Tasmania; and the Mortgage Guide UK[4] .
The indicator has been popularised by Demographia International, and was called the 'Median multiple' from their second comparative international survey in 2006.[5]
The median multiple is the ratio of the median house price by the median gross (before tax) annual household income. This measure has historically hovered around a value of 3 or less, but in recent years has risen dramatically, especially in markets with public policy constraints on land and development.[6]
The International Housing Affordability Survey uses the following table to determine affordability ratings:[7]
| Rating | Median multiple | |
|---|---|---|
| Severely unaffordable | 5.1 and over | |
| Seriously unaffordable | 4.1 to 5.0 | |
| Moderately unaffordable | 3.1 to 4.0 | |
| Affordable | 3.0 and under |