"Housing’s Back" or is it? Understanding Measures of Housing Affordability
Rodney HarrellRodney Harrell, PhD is the Senior Strategic Policy Advisor for Housing and Livable Communities in AARP’s Public Policy Institute. Dr. Harrell has made numerous public appearances to discuss issues of housing, aging, and livable communities, and has been a featured speaker for audiences across the United States and in other countries. Dr. Harrell is also the Vice Chair - Policy for the Planning and the Black Community Division of the American Planning Association, and blogs at DrUrbanPolicy.com. All opinions expressed here are his own and not necessarily those of any organization.
According to the National Association of Realtors’ Housing Affordability Index, 2012 was a record year for housing affordability. The release of their results led to articles with titles such as “Housing Today Is More Affordable Than At Any Time In History” on an investment blog and “2012 a banner year for housing affordability, industry group says” in a major national newspaper.
I’ve also seen several TV reports that covered how affordable housing has become. If that’s the case, then how could we release a paper titled “Loss of Housing Affordability Threatens Older Middle Class Adults” as part of AARP’s Middle Class Security Project?
I’m not going to focus on all of the details, but yes there are data differences: our paper focused on the 50+ middle class only, looked at a different time frame, and used different datasets than the NAR study. More important than all of that is what we meant by “affordability.” When I investigate housing affordability, I want to know whether people can afford to stay in their homes on an ongoing basis. NAR is focused on home sales, and their index focuses on the purchase of a home.
Read the full article in Dr Urban Policy.