In order to measure affordability we need to normalise the housing cost data by household income. People in larger cities tend to have higher incomes than people in smaller cities, so if we normalize the cost of housing by income for any city, we have an affordability index that makes it more accurate to compare cities of different sizes and income brackets regarding ‘affordability’.

The housing affordability rating categories calculated using the Median Method are as follow:

Affordability is a better indicator than housing cost of a city’s livability as it takes into account cost in relation to income.