Looking to buy a mid-priced home in Austin, Dallas, or Houston? You will need to earn over $100,000

If you don’t earn more than $100,000 a year, you can’t afford to buy a median-priced home in three of Texas’ largest metro areas: Dallas-Fort Worth, greater Houston, and the Houston area. Austin.

That’s one of many findings from a new Harvard University study on the nation’s housing situation, which shows that a large portion of the population — both renters and homeowners — are paying more for housing than they are. that she can afford.

According to the State of Homelessness report from Harvard’s Joint Center for Housing Studies, more than one in three Texas households pay more than they can afford for housing. A quarter of homeowners and a full half of renters are considered cost-burdened.

Many spend more than half of their monthly income on housing: 1 in 10 owner households in Texas and 1 renter household in Texas.

“I think the big issue in housing is affordability. Lack of affordability in particular poses a major challenge for renters, landlords and potential landlords,” said Daniel McCue, a senior researcher at Harvard.

Prospective homeowners face a market in Texas where home values ​​have increased much faster than incomes.

In Dallas-Fort Worth, for example, the median home price was three times the median income in 2013. A decade later, the median home price was nearly five times the area’s median income .

It’s part of a national trend, but the gap between income and home prices has widened faster than the national average in 15 of Texas’ 25 largest urban areas over the past decade.

The Sherman-Denison area saw the largest decline in affordability, and Bryan-College Station now has the largest gap between income and housing prices. It now takes more than five times the median income to afford the median price for a home.

With mortgage rates much higher than they have been in recent years, buying a home is simply impossible for a growing number of people. They also pay higher rent, making it harder to save for a down payment.

“In reality, the rug has been pulled out from under a lot of potential homeowners because interest rates have skyrocketed, which affects how much your monthly home payment will be and that has really put a lot of people out of the game for homeownership,” McCue said.

McCue says many homeowners, those who bought before house prices exploded during the pandemic and who benefit from low interest rates on their home loan, are struggling, especially those with income fixed or who were barely able to afford the house they purchased.

“For marginalized people, these other costs that go up like insurance payments and property taxes that go up when the value of your home goes up, those things make a difference and can be a pretty significant payment,” McCue said.

But it is the tenants who face the greatest difficulties. Texas is experiencing a deeper version of a broader national trend: Low-cost rentals have disappeared, putting pressure on low- and, increasingly, middle-income renters.

“We saw a drop of 6 million units renting for $1,000 or less (nationally), and that’s the rent you would need to find to not be burdened by rent and pay more 30% of your income in rent,” McCue said. .

Decreasing affordability will likely only worsen the country’s inequality, McCue said. The country has long experienced a huge gap in wealth, income, and homeownership rates between black and white families, due to a long history of policies and practices that, whether intentionally or not, have led to racial disparities.

Homeownership is a way to create and pass on generational wealth, he said. As access to property is reserved for a smaller and more privileged part of the population, inequalities risk worsening.

Some positive trends are seen in the report, McCue said, including increased attention to the issue of affordability by policymakers. It highlights efforts to change policies so that it is less costly or difficult to build new, more affordable homes and apartments, as well as financing programs that help low- and middle-income people pay rent or become owners.

“Housing affordability is increasingly a priority issue, garnering more attention at the state’s local and federal levels,” he said. “Momentum is being created to resolve these problems. »

Do you have any advice? Christopher Connelly is KERA’s One Crisis Away reporter, exploring life on the financial edge. Send an email to Christophe at [email protected].You can follow Christopher on Twitter @hithisischris.

KERA News is made possible thanks to the generosity of our members. If you find these reports useful, consider make a tax-deductible donation Today. THANKS.