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House Affordability, 1970-92

Ever hear the one about how the middle class couldn't afford to buy a house in the 1980s? Well the person saying that must still be stuck in the 1970s because house afforability rose during the 1980s, after plummeting during the 1970s.

As the table below shows, income gains and falling interest rates combined to make housing more affordable as the Reagan expansion grew, finally recovering the losses incurred during the Carter years.

Notes: nominal dollars

Source: "Housing Affordability Index", The Right Data, page 277.

Housing Affordability Index
Year	Median Home Price	Median Income	Mortgage Rate	Annual P&I (% Income)	Affordability Index
1970	$ 23,000	$ 9,867	8.35%	17.0%	147.3
1971	24,800	10,285	7.67	16.5	151.9
1972	26,700	11,116	7.52	16.2	154.8
1977	42,900	16,010	9.02	20.7	120.6
1981	66,400	22,388	15.12	36.3	68.9
1988	89,300	32,191	9.31	22.0	122.0
1992 (Feb)	103,800	36,788	8.43	20.1	138.3

Visit the Census Bureau for historical and current numbers for households and families.

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