Austin Loses Ground in Home Affordability as Texas, US Prices Rise

HOUSTON – (By Dale King, Realty News Report) – Most Texas communities have long boasted moderate home prices favorable to attracting families, job seekers, former renters and elder citizens looking to set down new residential roots for a smaller outlay of cash.

The May Housing Affordability Index just published by Realty Hop, which seeks out the best property deals for investors and buyers looking for asset property, sifted through the affordability ratings for the 100 most populous U.S. cities and found some surprising conclusions while cogitating the impact of those figures.

Perhaps most notable to Texans is the fact that two major metros, Dallas and Austin, scored exceptionally high on the list of least affordable cities and towns.

Least Affordable: Los Angeles and New York City

And while Los Angeles and New York City copped the top spots as the least affordable communities in the entire nation, the city that offers the best bang for the residential buck is a Rust Belt baby generally known for high unemployment rates.

The Realty Hop report seems to encourage potential homeowners bent on finding bargain basement rates should pack up the motor car and head for the motor city, Detroit, Mich.

Motown, the document concludes, has “remained the most affordable U.S. market among the top 100 most populous cities. A family in the city would only need to set aside 15.38% of their annual income to own, after factoring in property taxes, monthly principal and interest.”

Detroit is Dirt Cheap

It turns out the median asking price for a Detroit dwelling is $69,900.

The faltering housing situation in Austin comes on the heels of a major corporate Renaissance in the Lone Star Capital that found Elon Musk moving his Tesla electric truck mega-plant to Austin. Oracle Corporation, the multinational computer technology corporation was formerly headquartered in Redwood Shores, Calif.,until December 2020 when it moved its headquarters to Austin.

That’s only the tip of the manufacturing iceberg that has struck in Austin. Dozens of other firms have finalized plans to move while others are still pondering.

Austin Home Prices Skyrocket

Listed among the “most notable changes” in the May Realty Hop report is the status of Austin. “The city jumped four spots this month to become the 19th least affordable city in the nation,” it says.

“Strong demand has been consistently pushing up the real estate values,” it adds. “On average, a family would have to allocate 42.81% of their annual income, or $2,553 per month, to own a home.”

The most recent Realty Hop stats place Austin and Dallas in nearly the same category. Dallas is ranked as 17thleast affordable city among the 100 that were subject to the study. That’s a one-slot change from last year’s ranking of 18.

Big D sports an annual household income of $52,580 for residences in a community where home prices are listed at an average of $369,500. That means a home purchase with all the fixings would require buyers to stake just over 45% of their income on a house buy.

Next Texas community on the affordability list is Houston, coming in at 27thleast affordable, a two-level change from last year’s rating of 29. Those looking to buy a house should either bank or set aside some savings. But if they have none, they’ll have to allocate just under 39% of their annual average income of $52,338 to cover the price that averages $318,000, and then pay monthly mortgage, taxes and other fees and levies.

Actually, Texas placed a dozen communities in the list 0f 100 which slowly swings from least affordable to most affordable as one approaches the 100thlisting.  Other Lone Star communities with rankings are:

  • Irving, number 34, a one-place change from 33 last year. Potential homeowners would have to make a 36.67% dip into their annual household income pool.
  • Fort Worth, far down at 55 (a change from last year’s 54), is said by Realty Hop to require a 31.23% lift from the salary kitty to cover the cost of a new home.
  • San Antonio is ranked 61, a change from 62 in 2020. Folks who want a house will have to peel three dollars out of every 10 to make the nut.
  • Laredo, which remains in the 63rdspot, would mandate a 29.17% withdrawal of cash to buy a home.

Next on the list are Arlington, Number 64, up from Number 70 last year, requiring an investment of 29.16% of household income; Corpus Christi, ranking 65th (64th last year) would take just over 29% from the bank account; El Paso, ranked 68thfor the second year in a row and Plano, Number 69 (ranked 71 last year) would both require an investment of just under 29% of household income and Lubbock, ranking number 74 (last year it was 65). Workers who make an average of $50,453, would need 27.9% of that amount.

Garland ranks at Number 79, a change from last year’s 74. Purchasing a home would take a 27.15% share of household income.

The Dishonor Roll of Affordabily

Least affordable housing markets in the U.S. are:

  • Number 1 again is Los Angeles. Despite a median household income of $62,142, a family in L.A. would have to spend 85.60% of their annual income to own, or $4,433 per month.
  • Number 2, New York outpaced Miami this month as the second most cost-burden U.S. city, thanks to increased demand driven by first-time homebuyers looking for a deal in the post-pandemic world. With a median asking price of $950,000, an average household looking to own would have to set aside 81.46% of annual income.
  • Number 3, Miami, fell one spot to become the third least affordable housing market despite a 1.90% month-over-month change in homeownership burden. The current monthly cost to own a home in Miami is $2,586, which translates to 79.47% of a family’s annual income.
  • Newark, N.J. remained the fourth most expensive city for owning in the nation. With a median household income of $35,199 a year, a family can expect to allocate 71.43% of their income toward the costs of homeownership.
  • San Francisco rounded out five least affordable markets. Despite the city’s strong income of $112,449, a family looking to own would have to spend 65.52% of their annual income toward mortgage payments and taxes, or $6,139 per month in dollar terms.

Other affordable housing metros are: Number 2, Wichita, Kansas, 16.32% of annual income; Number 3, Fort Wayne, Ind., 16.75%; Number 4, Virginia Beach, Va., 22.67% of household income and Louisville, Ky., Number 5. A family would need to contribute just over $1,000 per month toward mortgage and property taxes, to own a home. This translates to 22.67% of their annual income.

May 4, 2021 Realty News Report Copyright 2021

File: Austin Loses Ground in Home Affordability

For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up  by Ralph Bivins. Available on Amazon  



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