This section of Department of Numbers is no longer being updated and may be removed in the future. The data here is out of date and should no longer be used.
Madison, Wisconsin Home Affordability
The data below measures home affordability for the Madison, Wisconsin metropolitan area using price-to-income and price-to-rent metrics.1 The maximum affordable loan amount for the median household income is also calculated. You can also compare Madison home affordability to other cities.
Madison, Wisconsin Home Price-to-Income Ratios
The current price-to-income ratio for Madison is 3.57 as determined by March 2014 Realtor median sales prices. The second chart shows a history of the ratio as an index calculated from the Federal Housing Finance Agency's Madison HPI series. Median household income data for Madison is from the Census American Community Survey.
Price-to-Income Dollar Ratio: Realtor
Price-to-Income Index Ratio: FHFA
Note: Index set to 100 in Q1 of 2000
Madison, Wisconsin Home Price-to-Income Ratio History
| Date | Realtor (Dollar Ratio) |
FHFA (Index Ratio) |
|---|---|---|
| March 2014 | 3.57 | — |
| December 2013 | 3.71 | 114.2 |
| September 2013 | 3.89 | 114.8 |
| June 2013 | 3.78 | 113.0 |
| March 2013 | 3.32 | 112.2 |
| December 2012 | 3.58 | 112.4 |
| September 2012 | 3.58 | 112.0 |
| June 2012 | 3.58 | 111.4 |
Madison, Wisconsin Home Price-to-Rent Ratios
The current adjusted price-to-rent ratio for Madison is 19.19 as determined by March 2014 Realtor median sales prices. This ratio is calculated using household size adjusted median contract rent for Madison. The chart below shows an index of the rent ratio calculated from the metro FHFA HPI series and the Madison median contract rent data from the Census ACS.
Price-to-Rent Dollar Ratio: Realtor, Realtor Adjusted Rent
Price-to-Rent Index Ratio: FHFA
Note: Index set to 100 in Q1 of 2000
Madison, Wisconsin Home Price-to-Rent Ratio History
| Date | Realtor (Dollar Ratio) |
Realtor Adjusted (Dollar Ratio) |
FHFA (Index Ratio) |
|---|---|---|---|
| March 2014 | 22.91 | 19.19 | — |
| December 2013 | 23.83 | 19.97 | 106.4 |
| September 2013 | 25.00 | 20.95 | 107.0 |
| June 2013 | 24.31 | 20.37 | 105.3 |
| March 2013 | 21.34 | 17.88 | 104.6 |
| December 2012 | 22.97 | 19.25 | 104.7 |
| September 2012 | 22.97 | 19.25 | 104.4 |
| June 2012 | 22.97 | 19.25 | 103.8 |
Madison, Wisconsin Home Rent-to-Mortgage Payment Ratio
The rent-to-mortgage payment ratio uses the adjusted rent for Madison against a 100% loan-to-value mortgage (30-year fixed) for the median price home using Realtor home sales statistics. It's a lot like a cap rate, but I find it more appealing in ratio form. A ratio of 1.0 means that annual rent is equivalent annual mortgage payments. Values less than 1.0 indicate rents are cheaper and values greater than 1.0 mean mortgage payments are cheaper. Beware, taxes are not considered here. The rent-to-mortgage payment ratio for Madison was 0.87 in March 2014.
Rent-to-Mortgage Payment Dollar Ratio: Realtor
Madison, Wisconsin Home Rent-to-Mortgage Payment Ratio History
| Date | Realtor Adjusted Rent (Dollar Ratio) |
|---|---|
| March 2014 | 0.87 |
| December 2013 | 0.83 |
| September 2013 | 0.79 |
| June 2013 | 0.85 |
| March 2013 | 1.03 |
| December 2012 | 0.98 |
| September 2012 | 0.96 |
| June 2012 | 0.94 |
Madison, Wisconsin Inferred Affordable Mortgage
The inferred affordable mortgage value is determined by taking the median household income for Madison, Wisconsin and calculating the mortgage 30% of that income could afford. Traditionally, 30% of income is the maximum amount a homeowner could use towards a home loan. Inferred affordable loan values are calculated from ACS median household income and average monthly mortgage rates.
Inferred Affordable Mortgage
Madison, Wisconsin Inferred Affordable Mortgage History
| Date | Inferred Mortgage |
|---|---|
| February 2014 | $297,521 |
| January 2014 | $292,984 |
| December 2013 | $291,952 |
| November 2013 | $298,938 |
| October 2013 | $301,443 |
| September 2013 | $290,925 |
| August 2013 | $291,952 |
| July 2013 | $295,065 |
| June 2013 | $305,809 |
| May 2013 | $326,260 |
| April 2013 | $329,932 |
| March 2013 | $325,049 |
| February 2013 | $326,665 |
1. Specifically, home prices are from the non seasonally adjusted FHFA all-transactions quarterly series. Dollar ratios are calculated using NAR metro prices when available. Rent and income data are from the Census ACS and are carried forward into the following year prior to release of the new data. ↩
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