For anyone wondering how these price multiples translate to a fraction of median annual income paid on mortgage..
Briefly poking around a mortgage payment estimator (assuming 20% down, 3.75% 30 year fixed rate), annual mortgage payments come to roughly 7.2% of purchase price (including tax and insurance). Slightly higher towards $100k price (7.8%) and slightly lower towards $1.5M+ (6.8%), but lets say 7.2%.
So, for a house priced at X times median income, you're paying 0.072X of annual median income every year into mortgage payments. 2-3x in the chart means 14-21% of income spent on mortgage. 8x means 57.6% of median income spent on mortgage. (Quick reminder that 20% down on an 8x house is 160% of median annual income in the first place)
Briefly poking around a mortgage payment estimator (assuming 20% down, 3.75% 30 year fixed rate), annual mortgage payments come to roughly 7.2% of purchase price (including tax and insurance). Slightly higher towards $100k price (7.8%) and slightly lower towards $1.5M+ (6.8%), but lets say 7.2%.
So, for a house priced at X times median income, you're paying 0.072X of annual median income every year into mortgage payments. 2-3x in the chart means 14-21% of income spent on mortgage. 8x means 57.6% of median income spent on mortgage. (Quick reminder that 20% down on an 8x house is 160% of median annual income in the first place)