Homeownership is falling out of reach for more Houston and Harris County residents – Houston Public Media

(AP Photo/Matt Rourke, file)

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A new report from the Kinder Institute for Urban Research reveals what many Houstonians have long known: homeownership is becoming increasingly out of reach for many people.

The 2024 Report on the State of Housing in Harris County and Houston reveals, among other things, that median home prices over the past year reached $315,000 in Harris County and $335,000 in the city ​​of Houston.

It also found that the majority of Harris County neighborhoods are not affordable, even for households earning six figures. Steve Sherman is a research scientist at the Kinder Institute for Urban Research at Rice University and one of the co-authors of the report.

This is the fifth year the Kinder Institute has released this report, and it indicates that between 2018 and 2023, housing prices increased 43% in Harris County.

“However, because of inflation and high interest rates, purchasing power has not increased enough,” Sherman told Craig Cohen on Monday’s Houston Matters. “So house prices increased by 43%, but in Harris County, household purchasing power only increased by 1.2%, meaning the gap exploded.”

Two reasons Houstonians haven’t bought homes in recent years: Wages haven’t kept up with inflation and interest rates have risen.

But despite the increase, Houston remains more affordable than its peers, he said.

“When I talk about this affordability gap, this gap between what people can afford based on regional household income and what’s actually for sale, it’s worse in other major cities in Texas, with the exception of San Antonio, Chicago and Atlanta, sort of the metropolitan centers of similarly sized metropolitan areas,” Sherman said. “Although we have some climbing to do to get out of this. hole, we don’t have as many as our comparable cities.”

Someone looking to purchase a home in the Houston area and looking to put 20% down would need about $67,000 for a median-priced home. Few people could afford it, Sherman said. But there are some exceptions, such as for first-time home buyers.

“That leaves that advantage for people who already own a home, or maybe have generational wealth,” he said. “However, for those looking to make the transition from renting to homeownership, it is difficult and the figures that I have shared, these frightening figures on the affordability gap, this affects all households ; for renting households, it is even greater.”

For tenants, it’s even worse.

“While purchasing power has increased by about 5%, the median renting household in Harris County can only afford a home that costs about $130,000.”

The report also examines gentrification. Sherman defined gentrification as the production of space, the creation of neighborhoods specifically for the wealthier at the expense of existing residents being displaced.

In the Houston area, the report identified that one in ten neighborhoods had indicators of gentrification.