notice

 

U.S. Department of Housing and Urban Development
PDR-96-01


Special Attention of:
Secretarial Representatives, State/Area Coordinators, Economists

Issued: December 27, 1996
Expires: Effective until superseded

Cross References:


Subject: Estimated Family Incomes for Fiscal Year 1997

This memorandum transmits median family income (MFI) and income distribution estimates for Fiscal Year 1997 (FY 1997). They are calculated for each metropolitan and nonmetropolitan area using the Fair Market Rent (FMR) area definitions applied in the Section 8 Housing Assistance Payments program. The estimated median family income for the United States for FY 1997 is $43,500.

The FY 1997 MFI estimates are based on 1990 Census median family income estimates updated to 1997 with a combination of Bureau of Labor Statistics earnings and employment data and Census Divisional P-60 median family income data. Attachment 1 provides an explanation of the methodology used to develop these estimates. Attachment 2 provides median income estimates for States, and Attachment 3 provides local estimates of median family incomes. Attachment 4 provides the area definitions used for income limits.

Please note that the use of the HUD median family income estimates and income limits is subject to individual program guidelines covering definitions of income and family, family size, effective dates, and other factors. If your have any questions concerning these income estimates, please refer them to your Office's economist. Public inquiries may be referred to HUD USER, whose toll-free number is 1-800-245-2691 (use 202-708-3178 in the Washington metropolitan area).

Go to HUD Median Family Income Estimates for FY 97

Michael A. Stegman
Assistant Secretary for Policy Development and Research

Previous Editions are Obsolete
Distribution: W-3-1
HUD 21B (3-80)
GPO 871 902


Attachments

Attachment 1

HUD METHODOLOGY FOR ESTIMATING FY 1997 MEDIAN FAMILY INCOMES
(ECONOMIC AND MARKET ANALYSIS DIVISION, OFFICE OF ECONOMIC AFFAIRS, PD&R)

FY 1997 HUD estimates of median family income are based on 1990 Census data estimates updated with a combination of local Bureau of Labor Statistics data and Census Divisional data. Separate median family income estimates (MFIs) are calculated for all Metropolitan Statistical Areas (MSAs), Primary Metropolitan Statistical Areas (PMSAs), and nonmetropolitan counties.

The income adjustment factors used to update the 1990 Census-based estimates of MFIs are developed in several steps. Average wage data from the Bureau of Labor Statistics (BLS) were available for 1989 through the end of 1994 at a county level, and were aggregated to the metropolitan area level for multi-county metropolitan areas. Census Divisional level median family and household income estimates were available from the Current Population Report (CPS) March 1990-95 surveys, which measure incomes from mid-1989 through mid-1994. These data were then used to update mid-1989 income estimates from the 1990 Census to the middle of 1994. The mid-1994 estimates were then trended forward to mid-1995 using the national-level change from the March 1996 CPS results. Theses estimates were then trended forward to mid- FY 1997 using a factor based on past P-60 Series trends. The step-by-step normal procedures as well as the exception procedures used are as follows:

    (1) Estimate mid-1989 local median family incomes using 1990 Census data. (Current HUD Section 8 Fair Market Rent (FMR) program definitions are used to define metropolitan areas, which are normally the same as Office of Management and Budget metropolitan area definitions.)

    (2) Calculate the BLS wage change factors for each Census Division for the 1989-94 period as follows:
 Census Division BLS Wages (1994) ____________________________________ Census Division BLS Employees (1994) _______________________________________ = 5-year BLS wage increase factor for Census Division Census Division BLS Wages (1989) ____________________________________ Census Division BLS Employees (1989) 
    (3) Calculate the change in median family and household incomes for the nine Census Divisions for the 1989-1994 period using Census P-60 series data, as follows:
 Census Division P-60 MFI (1994) _______________________________ = 5-year increase factor for Census Census Division P-60 MFI (1989) Division P-60 Median Family Income 

    (4) Compare the BLS and P-60 series Census Divisional factors calculated in steps 2 and 3 to provide a means of adjusting local BLS wage factor changes so that they aggregate to the same change factor as P-60 changes in family incomes.
 5-year increase factor for Census Division P-60 MFI _________________________ = 5-year ratio of Census Division P-60 MFI 5-year increase factor for to 5-year ratio of Census Division BLS Census Division BLS Wages wage changes 
    (5) Calculate the 1989-94 increase factors for the individual metropolitan areas and nonmetropolitan counties by applying the Census Divisional index factors from step 4 to local BLS data.
 Local BLS Wages (1994) __________________________ Local BLS Employees (1994) Ratio of Census 5-year income _________________________ * Division P-60 = adjustment = 1989 to mid-1994 MFI to Census factor for MFI adj. factor Local BLS Wages (1989) Division BLS wages MSA or County __________________________ Local BLS Employees (1989) 
    (6) Convert 1989-94 step 5 change factor to a 1989-1997 change factor by using an annual trending figure of 4.7 percent for the mid-1994 to mid-1995 period based on the results of the March 1996 CPS survey. A 4.0 percent factor is then applied to the update the mid-1995 estimate to mid-1996, and a 3.0 percent factor (3/4ths of 4.0 percent) is applied to the mid-1996 to April 1, 1997 period. (Use of a trending factor is necessary because of lags in Bureau of Labor Statistics and P-60 Series data availability; the 4.0 percent factor is based on national income change patterns in recent years.)
 (Step 5 adj. factor) * 1.047 * 1.04 * 1.03 = 1989 to mid-FY 97 adjustment factor 
    (7) Calculate median family incomes for FY 1997 by multiplying the step 1 Census estimate of median family income by the income adjustment factor derived in Step 6.
 1990 Census Median Family Income * Step 6 factor = FY 1997 MFI estimate 
    (8) For American Housing Survey areas, compare the MFI estimates from step 7 with median family income estimates based on post-1989 American Housing Survey (AHS) estimates of median family income updated to 1997. Past analysis shows that there is 95 percent likelihood thatthe true local median family income is within 6 percent of the AHS-based estimate. For areas where an AHS-based estimate differs by more than 6 percent from the Census-based estimate, local MFI estimates are increased or decreased so that they are within 6 percent of the AHS-based estimate.
    (9) Compare the 1997 MFI estimate with the 1996 MFI estimate. If the 1996 estimate is higher, set the 1997 estimate at the 1996 level. (This policy is applied except when estimates are revised with decennial Census data, and serves to minimize disruption in program activities due to temporary decreases in income estimates.)

In addition to the above procedures, constraints are placed on annual changes in the Census Divisional and BLS change factors based on past experience. These guidelines constrain increases for a small number of areas with unusually high increases.


Attachment 2

FY 1997 MEDIAN FAMILY INCOMES FOR STATES AND METROPOLITAN AND NONMETROPOLITAN PORTIONS OF STATES

  FY 1997 1989
TOTAL METRO NONMETRO TOTAL METRO NONMETRO
ALABAMA 37100 40200 31500 28688 30966 24500
ALASKA 52600 58600 48500 46580 50109 44045
ARIZONA 42600 44500 31200 32177 33536 23997
ARKANSAS 33800 39100 29500 25395 29425 22208
CALIFORNIA 50000 50600 35400 40558 40969 29946
COLORADO 48700 50900 38700 35929 37461 28257
CONNECTICUT 60400 60800 53000 49198 49512 43591
DELAWARE 51400 54100 39400 40251 42237 31112
DIST. OF COLUMBIA 49300 49300 0 36255 36255 0
FLORIDA 40900 41700 32500 32211 32761 25874
GEORGIA 42500 47600 33600 33529 37551 26690
HAWAII 54900 57900 48500 43176 45313 37990
IDAHO 40600 45600 37300 29472 32220 27799
ILLINOIS 50100 53100 37600 38663 40964 29693
INDIANA 43800 45900 39000 34082 35664 30800
IOWA 42100 47400 39200 31658 35618 29303
KANSAS 42900 50200 36100 32965 38356 28067
KENTUCKY 34800 42100 28800 27028 32411 22542
LOUISIANA 34400 36900 27400 26313 28246 21177
MAINE 37800 42800 35900 32421 36629 30719
MARYLAND 57800 58800 43100 45033 45988 33695
MASSACHUSETTS 54200 54400 44900 44366 44728 37765
MICHIGAN 47100 50400 35500 36651 39033 27893
MINNESOTA 48900 54700 38400 36915 41398 28933
MISSISSIPPI 31500 37900 28300 24447 29496 21994
MISSOURI 41500 47300 31900 31837 36252 24324
MONTANA 37500 41400 36100 28042 30151 27349
NEBRASKA 42600 49600 37100 31634 36639 27623
NEVADA 49200 49100 49500 35837 35891 35577
NEW HAMPSHIRE 49200 53500 43100 41628 45429 36623
NEW JERSEY 59500 59500 0 47589 47589 0
NEW MEXICO 37700 43500 30600 27623 31550 23165
NEW YORK 48800 50000 37100 39740 40635 31472
NORTH CAROLINA 40600 44000 35000 31548 34083 27206
NORTH DAKOTA 37200 42400 34000 28707 32677 26194
OHIO 43900 45500 38800 34350 35392 30562
OKLAHOMA 36000 40200 30800 28553 31805 24139
OREGON 40700 43700 34600 32336 34610 28125
PENNSYLVANIA 42100 43800 34500 34856 36147 28934
RHODE ISLAND 47100 47100 46400 39172 39078 40639
SOUTH CAROLINA 39200 40800 34700 30797 32349 26904
SOUTH DAKOTA 37400 43400 34500 27601 32338 25547
TENNESSEE 39200 42200 33200 29546 32129 24935
TEXAS 41600 43900 31500 31553 33231 24585
UTAH 44700 46600 38500 33245 34322 30183
VERMONT 40700 48900 38200 34779 41968 32453
VIRGINIA 48200 53200 34800 38208 42000 28301
WASHINGTON 46100 48700 35100 36794 38495 29671
WEST VIRGINIA 31400 37000 27600 25602 29882 22654
WISCONSIN 45500 48700 39600 35081 37659 30290
WYOMING 42000 42600 41900 32215 32529 32096
UNITED STATES 43500 46700 33200 35224 37626 27273

NOTE: Definition of metropolitan areas are current as of October 1996

FY 1997 Income Limits