Subject: Estimated Median Family Incomes for Fiscal Year 1999

This memorandum transmits median family income (MFI) and income distribution estimates for Fiscal Year 1999 (FY 1999). 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 1999 is $47,800.

The FY 1999 MFI estimates are based on 1990 Census median family income estimates updated to 1999 using 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 matters, please refer them to your Office's economist. Public inquiries may be referred to the HUD USER reference service, 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, which provides a menu from which you may select the year and type of data of interest.

Xavier de Souza Briggs
Deputy Assistant Secretary for Research, Evaluation and Monitoring, RR

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

Attachments

Attachment 1

HUD METHODOLOGY FOR ESTIMATING FY 1999
MEDIAN FAMILY INCOMES
(ECONOMIC AND MARKET ANALYSIS DIVISION,
OFFICE OF ECONOMIC AFFAIRS, PD&R)

FY 1999 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 1996 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 1990-98 surveys, which measure incomes from mid-1989 through mid-1997. These data were then used to update mid-1989 income estimates from the 1990 Census to the middle of 1997. The mid-1997 estimates were trended forward to mid-FY 1999 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 1989-96 period as follows:

Census Division BLS Wages (1996) Census Division BLS Employees (1996) Census Division BLS Wages (1989) Census Division BLS Employees (1989)

=

7-year BLS wage increase factor for Census Division

3. Calculate the change in median family and household incomes for the nine Census Divisions for the 1989-1997 period using Census P-60 series data, as follows:

Census Division P-60 MFI (1997) Census Division P-60 MFI (1989)

=

8-year increase factor for Census 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 plus contain an added year of CPS trending.

8-year increase factor for Census Division P-60 MFI 7-year increase factor for Census Division BLS Wages

=

Ratio of Census Division P-60 MFI to ratio of Census Division BLS wage changes

5. Calculate the 1989-97 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 (1996) Local BLS Employees (1996) Local BLS Wages (1989) Local BLS Employees (1989)	*	Ratio of Census Division P-60 MFI to Census Division BLS wages	=	8-year income adjustment factor for MSA or County
			=	1989 to mid- 1997 MFI adj. factor

6. Convert 1989-97 step 5 change factor to a 1989-1999 change factor by applying an annual trending figure of 4.0percent to update the mid-1997 estimate to mid-1998, and applying a 3.0 percent factor (3/4ths of 4.0 percent) to the mid-1998 to April 1, 1999 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) * 1.04 * 1.03 = 1989 to mid-FY 99 adjustment factor

7. Calculate median family incomes for FY 1999 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 1999 MFI est.

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 1999. 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 1999 MFI estimate with the 1998 MFI estimate. If the 1998 estimate is higher, set the 1999 estimate at the 1998 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.)

                       --------FY 1999----------     ---------1989---------- 



                    TOTAL     METRO  NONMETRO     TOTAL     METRO  NONMETRO   



  



ALABAMA            41500     44900     35100     28688     30966     24500   



ALASKA             53900     59200     50100     46580     50109     44045   



ARIZONA            45300     47300     32300     32177     33536     23997   



ARKANSAS           36500     42300     31800     25395     29425     22208   



CALIFORNIA         54100     54800     36700     40558     40969     29946   



COLORADO           51800     54300     40400     35929     37461     28257   



CONNECTICUT        62800     63700     53500     49198     49512     43591   



DELAWARE           58900     62400     43400     40251     42237     31112   



DIST. OF COLUMBIA  56000     56000         0     36255     36255         0   



FLORIDA            45700     46500     36100     32211     32761     25874   



GEORGIA            48300     54200     37500     33529     37551     26690   



HAWAII             57300     60100     50900     43176     45313     37990   



IDAHO              42100     47800     38200     29472     32220     27799   



ILLINOIS           56700     60300     41500     38663     40964     29693   



INDIANA            48900     51500     43600     34082     35664     30800   



IOWA               45500     51100     42100     31658     35618     29303   



KANSAS             46700     54900     38700     32965     38356     28067   



KENTUCKY           39300     47700     32200     27028     32411     22542   



LOUISIANA          36900     39700     29500     26313     28246     21177   



MAINE              38500     43600     36400     32421     36629     30719   



MARYLAND           64300     65700     47800     45033     45988     33695   



MASSACHUSETTS      56200     56900     46400     44366     44728     37765   



MICHIGAN           52900     56700     39400     36651     39033     27893   



MINNESOTA          53800     60700     41600     36915     41398     28933   



MISSISSIPPI        35500     42200     32100     24447     29496     21994   



MISSOURI           45200     51700     34900     31837     36252     24324   



MONTANA            38300     42100     36300     28042     30207     26977   



NEBRASKA           46600     54500     39800     31634     36639     27623   



NEVADA             51700     51700     51900     35837     35891     35577   



NEW HAMPSHIRE      50900     55700     44600     41628     45429     36623   



NEW JERSEY         63800     63800         0     47589     47589         0   



NEW MEXICO         39000     45200     31400     27623     31550     23165   



NEW YORK           53600     55000     39300     39740     40635     31472   



NORTH CAROLINA     46000     49900     38800     31548     34083     27206   



NORTH DAKOTA       40300     45600     36900     28707     32677     26194   



OHIO               49200     50800     43200     34350     35392     30562   



OKLAHOMA           38400     42500     32700     28553     31805     24139   



OREGON             45100     48800     37500     32336     34610     28125   



PENNSYLVANIA       45200     47000     36700     34856     36147     28934   



RHODE ISLAND       47800     48000     47700     39172     39078     40639   



SOUTH CAROLINA     43600     45400     38800     30797     32349     26904   



SOUTH DAKOTA       40400     46700     37800     27601     32338     25547   



TENNESSEE          44200     47800     37500     29546     32092     24937   



TEXAS              45800     48400     33900     31553     33231     24585   



UTAH               46900     49200     39200     33245     34322     30183   



VERMONT            41700     50600     38800     34779     41968     32453   



VIRGINIA           54200     59900     38300     38208     42000     28301   



WASHINGTON         51600     54500     38400     36794     38495     29671   



WEST VIRGINIA      34400     40800     30000     25602     29882     22654   



WISCONSIN          51200     55100     44400     35081     37659     30290   



WYOMING            42600     42600     42800     32215     32529     32096   



UNITED STATES      47800     51300     35900     35224     37621     27270   

NOTE: DEFINITIONS OF METROPOLITAN AREAS ARE CURRENT AS OF OCTOBER 1998