affordability gaps
Austin defies national trend with slightly more affordable starter homes than last year
This charming home at 8913 Pocono Cv. in Austin is on the market for $350,000.
A new income analysis by online real estate brokerage company Redfin has revealed just how much money a potential homeowner needs to make in 2023 to afford a "starter home" in Austin, a concept that's becoming seemingly less attainable with rising mortgage rates and increased competition among buyers.
The report revealed that first-time homebuyers need to earn $92,057 annually to afford home in Austin this year, which is (surprisingly) 3.3 percent less income than what was required in 2022.
According to Redfin, the average salary needed for a typical starter home in the United States is $64,403, about 13 percent more than a year ago. Despite being $27,654 above the national average, Austin's number is still an improvement over the city's standard from last year.
These findings further confirm that affordability is one of the biggest struggles for potential buyers in the current real estate market.
Median sale prices (for starter homes) in Austin are sitting at $347,000, and median mortgage payments are about $2,301 a month, the report said. However, the analysis indicates that home prices in the city have dropped 12.2 percent since this time last year.
Redfin senior economist Sheharyar Bokhari said in the report that it's a "wild goose chase" for homebuyers seeking their first home in the current market.
"The most affordable homes for sale are no longer affordable to people with lower budgets due to the combination of rising prices and rising rates," said Bokhari. "That’s locking many Americans out of the housing market altogether, preventing them from building equity and ultimately building lasting wealth. People who are already homeowners are sitting pretty, comparatively, because most of them have benefited from home values soaring over the last few years."
Bokhari predicted the wealth gap between current and potential owners could become "even more drastic" if current trends continue.
Buyers looking elsewhere in Central Texas might find some success. Even though the income necessary to afford a San Antonio home has risen by 18.7 percent, that only amounts to $55,657.
Elsewhere in Texas, a first-time homebuyer would need to make $57,513 to afford a home in Houston, which is nearly 14 percent more than in 2022. Fort Worth saw a similar percentage increase in income necessary to afford a home, at 14.4 percent, with buyers needing to make $64,933. In Dallas, potential homeowners saw a 10.6 percent increase in income needed to afford a home, making it the city with the second highest income required out of all Texas cities in the report: $72,885.
The full report can be found on redfin.com.
