Can a High School Grad Afford To Buy in North Texas?

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From staff reports

The good news? A person with a high school diploma could (in theory) afford to buy a home in North Texas. The bad news? It will probably take seven years (at least) to save the down payment.

A new Zillow research report matched median mortgage payments in the country’s 50 largest metro areas for the first quarter of this year to the most recent American Community Survey incomes for each educational level, adjusting the latter’s 2017 figures for 2019’s inflation.

Somewhat surprisingly, 36 of those 50 fleshed out to be theoretically affordable to households earning the income associated with a high school diploma-level of education. Dallas, Houston, San Antonio, and Austin were among the 36 cities named.

In fact, in Oklahoma City, a potential homebuyer wouldn’t even need a high school diploma to afford the median-valued home.

“That doesn’t mean all homes throughout those metro areas are affordable to all households with those degrees,” Zillow said. “Rather, the mortgage payment for a median-valued home in a given metro area is considered ‘affordable’ — it does not consume more than 30 percent of income — for a household making the typical salary of a household with those degrees.”

The figures also don’t factor in the task of saving for a down payment, which statistically can take seven years or more in many areas. For renters, who may be paying 27.8 percent of their income on rent, saving can be especially arduous.

“A mortgage on the typical U.S. home consumed just 16.8 percent of the country’s median household income in the first quarter, down from 17.6 percent in the fourth quarter 2018 and below the 21 percent average from 1985 through 1999,” the report said. “All those ratios are well below the long-standing rule of thumb that says housing should cost no more than 30 percent of a household’s income.”

 

To see the full report, click here.

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