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How much money you need to make to afford a median-priced home in Houston?

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Updated  October 20, 2023 11:00am CDT
Economy
FOX 26 Houston

Houston - Buying a home in the U.S. has become an uphill battle; skyrocketing mortgage rates and continually rising home prices make the American dream of homeownership increasingly harder to obtain. 

According to a report published by Redfin, the annual income needed to afford a home in Houston is a hefty $92,185, accompanied by a median monthly mortgage payment of $1,493 as of August 2023.

What does this mean?

Comparing this to the previous year, according to the report, the potential homeowners in Houston now need to earn 15% more, while wages have only seen a 5% increase. 

The report shows that U.S. homebuyers' monthly mortgage payments have risen to an all-time high of $2,866, an increase of 20% over last year.

Where's the financial help for home buyers?

We all know the price of housing is sky high these days, and business owners who purchase homes for the sole purpose of renting them out aren’t helping either. There are talks in some cities to limit the amount of properties investors can purchase.

Is affordability in the housing market limited to a specific region, or is it a national phenomenon?

The report reveals that this affordability crisis is a national phenomenon, with the most significant income uptick in Miami and the smallest in Texas' state capitol. 

Austin shows a comparatively modest 8% year-over-year increase, requiring homebuyers to earn $126,000 to afford a median-priced home. However, this is not without its challenges. Austin has the highest annual income needed to afford the median-priced home of the Texas U.S. metro areas listed. 

Here's a list of cities in Texas included in the study and how much money you need to make each year to afford a regular home there:

  • San Antonio - $87,273
  • McAllen - $68,184
  • Fort Worth - $98,185
  • Austin - $126,208
  • Houston - $92,185

When it comes to the connection between earnings and housing costs, what difficulties arise in buying homes?

In half of the 100 metros analyzed, buyers must command an annual income of six figures to afford the median-priced home. The typical monthly mortgage payment across the country has surged to an unprecedented $2,866, representing a 20% year-over-year increase, while the median household income of around $75,000 falls significantly short.

Whose affected most?

First-time homebuyers find themselves disproportionately affected, prompting the need for creative solutions such as considering condos or exploring more affordable areas. The situation is dire, given that the typical American household earns approximately $40,000 less than needed to purchase a median-priced home, according to the report.