How Three North Texas Cities Fared in a Study of Starter Home Affordability
Share News:
Twenty years ago, we left Texas and headed to San Francisco for fresh new jobs. It was the middle of the dot-com boom, but … who cares? It’s San Fran!
First off, finding a place to live. For funsies, we entered our Texas mortgage costs into whatever website tracked comparable values at the time.
The website giggled and spit out a rather disappointing result: a dilapidated mobile home 50 miles from San Francisco. This home on wheels had a missing wheel or two.
We decided the short-term solution was to rent, of course. But two years of that was enough and we returned to Texas as much wiser home shoppers. We knew that someday Californians would come to Texas for cheaper homes. We also realized starter homes were and are pretty much out of anyone’s price range in California.
That’s not the point, but it’s obvious in Point2’s latest study about the affordability of starter homes. A starter home can be affordable in some places, but don’t go looking into California, especially San Francisco.
The median starter home in San Francisco costs as much as the median starter homes in the top 10 most affordable cities combined. Other studies have determined that Californians migrate to Texas at twice the rate of Texans moving to California. It’s more than no state income tax and Tex-Mex.
As lending rates soar, renters in 46 of the 50 largest U.S. cities can no longer afford a starter home, up from 44 just two months ago.
What about Texas?
- Renters in Austin and 14 of the 50 largest U.S. cities earned less than half the income required to buy a starter home.
- On average, renters in Dallas earn $45,047 while the income required to afford a mortgage is $66,243. In Houston, renters earn $41,364 and an income of $60,186 is needed. This means they make $19,000 to $21,000 less than they need to buy a starter home.
- In Fort Worth, renters only earned 63 percent of the income that would be required to cover a mortgage.
- Renters in Arlington and San Antonio earned even less than 60 percent.
But it could be worse. Los Angeles, Long Beach, Oakland, San Jose, San Diego, Fresno, and Sacramento are cities where renters can’t afford a starter home. Austin is the only Texas city on the list.
On the flip side, renters can afford a starter home in two Oklahoma cities — Tulsa and Oklahoma City — and Detroit and Memphis.
Granted, these cities are not San Francisco, but you’ll have room in your household budget.
What is Point2? A division of Yardi Systems Inc., Canada-based Point2 covers real estate market trends and news and develops original studies on many real estate topics such as local, national, and international housing, and luxury real estate.
Report review: Point2 covered a lot of ground in its report. It also was honest, saying renters have more affordable options outside of the 50 cities in its analysis. It’s a four-bunny rabbit hole. 🐇 🐇 🐇 🐇
