How much Texans need to earn to afford the average home
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Home prices have not increased in Texas since dipping slightly in 2024, but increased mortgage rates in April may have homeowners reflecting on salary versus home prices.
According to a report from Redfin.com, home prices are still much higher now than before the pandemic across the country despite remaining stable. The report notes that Texas metros adjusted positively for the income-to-spending ratio for homeowners.
How much do I need to earn?
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By the numbers:
A home buyer in the United States needs to earn at least $116,782 to remain within the typical recommended house payments of 30 percent of monthly earnings, Redfin says. In Texas metro areas, the ratio is higher than the 30-percent recommendation.
- In Austin, at the 2024 median household income of $103,717, people would spend 39.6 percent of their earnings on monthly housing costs, down from 42.9 percent the previous year.
- In San Antonio, the number dropped 2.3 points to 35.4 percent.
- In Dallas, the number dropped 2 points to 38.9 percent.
- In Fort Worth, the number dropped 1.6 points to 36.7 percent.
- In Houston, the number dropped 1.2 points to 35 percent.
Overall, the ratio lowered in Texans' favor in 2024, but the monthly homeowner spending remains undesirable in comparison with household income.
Housing affordability improved in half of the largest US markets last year; see the list
Home affordability slightly improved in 2024, with Texas metros seeing the most gains.
Will housing prices drop?
In 2024, the cost of housing did lower slightly from the record-high year of 2023. However, the Redfin report does not expect affordability to dip significantly in the near future.
What they're saying:
"Affordability improved ever so slightly this year because wage growth outpaced the growth in monthly housing payments," said Redfin Senior Economist Elijah de la Campa. "But that’s not to say buying a home became affordable. For many Americans, buying a home remains more out of reach than ever and that’s unlikely to change anytime soon. Even with inventory trending upwards, we still expect prices to continue rising in 2025 due to a lack of homes for sale—pushing more would-be homebuyers to rent instead."
In comparison
The required income to own a home in Texas dipped slightly last year. Some major areas around the country saw the opposite trend.
By the numbers:
Ratios in areas like Memphis (+94.8%), Providence (+92.8%), and Las Vegas (+86.5%) increased in large numbers.
In Anaheim, CA, a household making the $121,925 median income in 2024 would’ve had to spend 75.9 percent of their earnings on monthly housing costs if they bought the $1,165,965 median-priced home. That’s up from 71.8 percent in 2023, Redfin says.
Additionally, Chicago jumped by 2 points, Miami by 1.7, and Newark, NJ, by 1.6.
The Source: Information in this article came from Redsin.com and Realtor.com, as well as previous reporting from FOX Television Stations.