Analysing a housing market like a pro

Affordability, rents and a six-point checklist

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In this lesson

Use price-to-income and price-to-rent ratios and a six-point checklist to judge any housing market.

Key takeaways

• Price-to-income = home price ÷ household income; 3 or less is called affordable, above 5 severely unaffordable.
• Price-to-rent = price ÷ a year's rent; high values mean buying is expensive versus renting.
• The six-point checklist: rates, affordability, market balance, new supply, population and jobs, policy.
• No single number calls the market — combine them. This is education, not advice on buying or selling a home.

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Educational information only - not financial advice.