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The Housing Affordability Index (HAI) is one of the best ways to understand whether a typical family can afford to buy a home, and that has changed over the years. As of March of 2026, the index stands at 113.7, meaning the typical family earns about 14% more than what’s needed to qualify for a median-priced home. That suggests affordability has improved from recent lows.

But homeownership comes with other costs as well, and one of the fastest-growing in recent years has been homeowners insurance. These costs are part of the monthly payment buyers face, but they are not included in most traditional affordability measures.

So, we built one that does.

A More Complete View of Affordability

Using the Producer Price Index (PPI) for homeowners insurance premiums—the data that tracks what insurers actually charge on homeowners policies, including the structural coverage that makes up most of the cost—we constructed a parallel version of the Housing Affordability Index.

Why PPI?

PPI may not be exactly what homeowners pay out of pocket each month, but it provides the closest, most consistent national proxy for homeowners insurance premiums over time. By comparison, the Consumer Price Index (CPI) reports tenants’ and household insurance costs, which primarily reflect renter-type coverage and tend to be lower than full homeowners insurance premiums. As a result, CPI understates the true impact of homeowners insurance on affordability.

What the Data Shows

The idea is simple: When insurance premiums are above their historical norm, buyers need more income to cover the full monthly payment than the mortgage-only index suggests. That means that affordability is lower.

When premiums are in line with historical norms, the two indexes are nearly the same. And that's exactly what the data shows: For most of the 2000s and 2010s, when insurance costs were rising gradually, the adjusted index and the standard index tracked each other almost perfectly. The difference was quite small.

But that started to change around 2021.

The Gap Today

As of March 2026, the standard index shows affordability at 113.7. But when we factor in homeowners insurance, it drops to 109.0. That means affordability is about 4 percentage points weaker than the headline HAI number suggests. That gap reflects today’s impact of higher homeowners insurance premiums on affordability—how much today's premiums exceed the pre-pandemic historical average. It's a snapshot of where we are right now relative to what was once normal.

But insurance costs didn't suddenly spike from zero. They've been rising for more than two decades. Slowly at first, then more quickly. So, if instead of asking, "How elevated are premiums today compared to their historical average," we ask, "How much has the long run of insurance inflation eroded affordability since 1998.” Then, the answer is closer to 10%.

This is the accumulated cost of annual increases that were small—a few percent here, a few percent there, compounding over time. And today, new homeowners are facing a significantly higher real cost of ownership than the household that bought twenty years ago at the same mortgage rate, simply because insurance has become more expensive.

Thus, taken together, nationally, the insurance-adjusted index suggests affordability is about 4% lower than the headline number today, and about 10% lower than it would be if insurance costs had remained stable since the late 1990s.

That's the new look at affordability—a more complete one to track along with HAI.

Methodology

We adjusted the Housing Affordability Index using homeowners insurance data from the Bureau of Labor Statistics. We use the Producer Price Index (PPI), which tracks insurer pricing for homeowners policies and better reflects the cost of homeownership than the CPI insurance series, which mainly captures renters-type coverage.

We assume that insurance accounts for about 6% of the monthly payment.

We applied two adjustments. The first compares today’s premiums to their historical average (1998–2019) to capture current pressure. The second compares today’s premiums to their 1998 level to capture the long-term increase.