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.