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U.S. Department of Housing and Urban Development
PDR-98-01

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

Issued: January 7, 1998
Expires: Effective until superseded

Cross References:

Subject: Estimated Family Incomes for Fiscal Year 1998

This memorandum transmits median family income (MFI) and income distribution estimates for Fiscal Year 1998 (FY 1998). 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 1998 is $45,300.

The FY 1998 MFI estimates are based on 1990 Census median family income estimates updated to 1998 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. HUD median family income estimates are also available at the Department's World Wide Web site (http://www.huduser.org/datasets/il.html gives you a menu from which you may select the year and type of data of interest).

Go to HUD Median Family Income Estimates for FY 98

Paul A. Leonard
Deputy Assistant Secretary for Policy Development, RP

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

Attachments

Attachment 1

HUD METHODOLOGY FOR ESTIMATING FY 1998 MEDIAN FAMILY INCOMES
(ECONOMIC AND MARKET ANALYSIS DIVISION, OFFICE OF ECONOMIC AFFAIRS, PD&R)

FY 1998 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 1995 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 1990-96 surveys, which measure incomes from mid-1989 through mid-1995. These data were then used to update mid-1989 income estimates from the 1990 Census to the middle of 1995. The mid-1995 estimates were then trended forward to mid-1996 using the national-level change from the March 1997 CPS data. These estimates were then trended forward to mid- FY 1998 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 (1995) ____________________________________ Census Division BLS Employees (1995) _______________________________________ = 6-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 1989-1995 period using Census CPS data, as follows:
 Census Division CPS MFI (1995) _______________________________ = 6-year increase factor for Census Census Division CPS MFI (1989) Division CPS Median Family Income

    (4) Compare the BLS and CPS 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. 
 6-year increase factor for Census Division P-60 MFI _________________________ = 6-year ratio of Census Division CPS MFI 6-year increase factor for to 6-year ratio of Census Division BLS Census Division BLS Wages wage changes
    (5) Calculate the 1989-95 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 (1995) __________________________ Local BLS Employees (1995) Ratio of Census 6-year income _________________________ * Division P-60 = adjustment = 1989 to mid-1995 MFI to Census factor for MFI adj. factor Local BLS Wages (1989) Division BLS wages MSA or County __________________________ Local BLS Employees (1989)
    (6) Convert 1989-95 step 5 change factor to a 1989-1998 change factor by using an annual trending figure of 4.16 percent for the mid-1995 to mid-1996 period based on the results of the March 1997 CPS survey. A 4.0 percent factor is then applied to the update the mid-1996 estimate to mid-1997, and a 3.0 percent factor (3/4ths of 4.0 percent) is applied to the mid-1997 to April 1, 1998 period. (Use of a trending factor is necessary because of lags in Bureau of Labor Statistics and CPS data availability; the 4.0 percent factor is based on national income change patterns in recent years.) 
 (Step 5 adj. factor) * 1.0416 * 1.04 * 1.03 = 1989 to mid-FY 98 adjustment factor
    (7) Calculate median family incomes for FY 1998 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 1998 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 1998. Past analysis shows that there is 95 percent likelihood that the 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 1998 MFI estimate with the 1997 MFI estimate. If the 1997 estimate is higher, set the 1998 estimate at the 1997 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 1998 MEDIAN FAMILY INCOMES FOR STATES, METROPOLITAN AND NONMETROPOLITAN PORTIONS OF STATES

  FY 1998 1989
TOTAL METRO NONMETRO TOTAL METRO NONMETRO
ALABAMA 38700 42000 32600 28688 30966 24500
ALASKA 53900 59200 50100 46580 50109 44045
ARIZONA 43500 45500 31200 32177 33536 23997
ARKANSAS 34700 40200 30100 25395 29425 22208
CALIFORNIA 52600 53000 36500 40558 40969 29946
COLORADO 49300 51600 39000 35929 37461 28257
CONNECTICUT 60400 61000 53000 49198 49512 43591
DELAWARE 53700 56500 40200 40251 42237 31112
DIST. OF COLUMBIA 51100 51100 NA 36255 36255 NA
FLORIDA 42400 43100 33300 32211 32761 25874
GEORGIA 44200 49500 34600 33529 37551 26690
HAWAII 56500 59600 50200 43176 45313 37990
IDAHO 41300 47200 37400 29472 32220 27799
ILLINOIS 53200 56500 39500 38663 40964 29693
INDIANA 46100 48400 41100 34082 35664 30800
IOWA 44500 50200 41200 31658 35618 29303
KANSAS 45500 53400 38200 32965 38356 28067
KENTUCKY 36400 44100 29800 27028 32411 22542
LOUISIANA 35200 37700 28000 26313 28246 21177
MAINE 37800 42800 35900 32421 36629 30719
MARYLAND 59200 60500 44100 45033 45988 33695
MASSACHUSETTS 54200 54400 44900 44366 44728 37765
MICHIGAN 49800 53500 37100 36651 39033 27893
MINNESOTA 51800 58100 40500 36915 41398 28933
MISSISSIPPI 33000 39600 29800 24447 29496 21994
MISSOURI 44300 50600 34000 31837 36252 24324
MONTANA 37500 41400 36100 28042 30151 27349
NEBRASKA 45700 53200 39300 31634 36639 27623
NEVADA 49800 49800 49500 35837 35891 35577
NEW HAMPSHIRE 49800 54300 43400 41628 45429 36623
NEW JERSEY 61200 61200 NA 47589 47589 NA
NEW MEXICO 38000 44200 30600 27623 31550 23165
NEW YORK 50700 52100 37700 39740 40635 31472
NORTH CAROLINA 42200 45800 36100 31548 34083 27206
NORTH DAKOTA 39300 44900 35800 28707 32677 26194
OHIO 46400 48000 40500 34350 35392 30562
OKLAHOMA 36500 40600 31100 28553 31805 24139
OREGON43200 46600 36500 32336 34610 28125
PENNSYLVANIA 43400 45100 35200 34856 36147 28934
RHODE ISLAND 47100 47100 46400 39172 39078 40639
SOUTH CAROLINA 40600 42200 35900 30797 32349 26904
SOUTH DAKOTA 39500 45700 36800 27601 32338 25547
TENNESSEE 41000 44600 34500 29546 32129 24935
TEXAS 42900 45300 32100 31553 33231 24585
UTAH 45200 47300 38500 33245 34322 30183
VERMONT 40700 48900 38200 34779 41968 32453
VIRGINIA 49900 55200 35900 38208 42000 28301
WASHINGTON 49000 51800 37300 36794 38495 29671
WEST VIRGINIA 32300 37900 28200 25602 29882 22654
WISCONSIN 48200 51500 41800 35081 37659 30290
WYOMING 42000 42600 41900 32215 32529 32096
UNITED STATES 45300 48500 34100 35224 37626 27273

NOTE: Metropolitan/nonmetropolitan categorizations based on OMB area definitions in effect on October 1, 1997.

FY 1998 Income Limits

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