Housing Affordability Index

The Israel quarterly housing affordability index examines household ability to purchase a four-room (three bedroom) apartment in twelve major cities in Israel. The index is based on a statistical analysis (hedonic estimation) of all housing transactions reported to the Israel Tax Authority, information on household (after tax) income published by the Israel Central Bureau of Statistics, and data on mortgage interest rates published by the Bank of Israel. The index is different from other common affordability indices, as it incorporates all three main factors that are associated with housing affordability: housing prices, incomes, and mortgage interest rates.