Housing affordability indices generally combine:
Correct Answer
C) Income, home prices and financing costs
Why this is correct: Housing affordability indices measure the ability of typical households to purchase a home, combining median income, median home price, and prevailing mortgage interest rates. The result is often expressed as a ratio (e.g., income needed to afford a payment). Why the other choices are wrong: "Population growth and migration figures" are demographic indicators, not direct affordability measures. "Construction costs and land prices only" are supply-side inputs, excluding buyer income and financing. "Property tax rates across jurisdictions" is a single cost component, missing income and price. Exam tip: Affordability = Buyer's ability to pay. It always involves income, price, and financing costs.
Why This Is the Correct Answer
Why this is correct: Housing affordability indices measure the ability of typical households to purchase a home, combining median income, median home price, and prevailing mortgage interest rates. The result is often expressed as a ratio (e.g., income needed to afford a payment). Why the other choices are wrong: "Population growth and migration figures" are demographic indicators, not direct affordability measures. "Construction costs and land prices only" are supply-side inputs, excluding buyer income and financing. "Property tax rates across jurisdictions" is a single cost component, missing income and price. Exam tip: Affordability = Buyer's ability to pay. It always involves income, price, and financing costs.
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