This fun ad is from the Cascade area of Renton in 1960. Notice the emphasis on the payment. What was important then, is still important today. It’s all about the payment.

If real estate was just about the price of the home, deciding when to buy or sell would be a lot easier. Many home buyers assume this is the case and especially for those dealing with sticker shock it’s easy to get distracted by the high prices of today’s homes.

Affordability is more than the house price

Housing affordability index will usually take a measure of an area’s median income and put that against the median home payment. The HAI index is published by the National Association of REALTORS. This index has a value of 100 when the median -income household has sufficient income to purchase a median-priced home. A higher number indicates that more households can afford a home.

Renton median home price and assumed payment

In Renton, the median household income is $77,739 per the US Census Bureau. In January, 2021 the median home price in Renton was $535,000. Assuming today’s interest rates of 2.615% as advertised by and 20% down payment. This would create a PITI (principal, interest, taxes and insurance) payment of $1,783.70. To afford a payment of $1,783.70 you should make $6,000 per month ($72,000 annually) and have no other debt.

HAI Formula to calculate affordability

HAI = (Median Household Income/Qualifying Income) * 100

Or the median Renton household income of $77,739 divide by the qualifying income of $72,000 * 100 equals 107.97

You can learn more about HAI here and how it is calculated here.

Interest rates are drivers of affordability

Today’s low interest rates are creating payments that are often lower than rents. When home buyers experience sticker shock we work diligently to help them understand what this means in terms of a house payment. By determining the house payment we can better assess if the home is worth the listing price as it relates to affordability. To give this some context, the average rent in Renton, Washington is $1,783 according to

Hopefully by understanding the above factors, a chart like the one below for the nationwide affordability starts to make more sense.


When purchasing a home, it’s important to think about the overall cost, not just the price of the house. Homes on your wish list may be more affordable today than you think. Let’s connect to discuss how affordability plays a role in our local market, and your long-term home ownership goals.