Austinites need to make more money to buy a home
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Austinites have to earn 40% more than a year ago to afford the region's median-value home, per a new analysis by real estate company Redfin.
The big picture: The income needed to afford a home began climbing at the start of last year and spiked further this year as soaring demand, limited inventory and increasing mortgage rates drove rapidly rising sale prices.
Why it matters: Central Texas incomes are not increasing that much, especially for those who don't have white-collar jobs, further narrowing entry into the Central Austin housing market for most people.
By the numbers: In March 2021, you had to earn at least $69,116 to afford the median home for sale in the greater Austin metro.
- Now, you need to pull down $97,210.
- For a median sales price home of $525,000, a monthly mortgage, with 5% down, jumped from $1,728 to $2,430.
- Of note: A monthly mortgage payment is considered affordable if the homebuyer spends no more than 30% of their income on housing.
Between the lines: Pandemic-fueled remote work has led a record share of homebuyers to move from one part of the country to another, driving up costs in Austin.
Yes, but: Buyers come here partly because "homes are relatively affordable compared to pricey coastal job centers, but the rise in home prices may eventually make Austin less popular," per the analysis.
- Maybe.
Good news and bad news: Austin salaries are on the upswing — but they're not swinging up fast enough.
- The number of six-figure-paying jobs in the greater Austin metro, for example, doubled between 2015 and 2020 to 80,560.
- Growth in average weekly earnings is up 10.5% in Central Texas since last year, from $1,048 to $1,158 — but those numbers are skewed by new, high-paying tech jobs at companies like Google, per a recent analysis in the Austin Business Journal.
What they're saying: "The surge in housing costs has far outpaced the increase in wages, meaning many Americans are now priced out of homeownership," said Redfin deputy chief economist Taylor Marr.
- "The good news is that there's a positive side to rising mortgage rates, too: They will likely slow price growth and curb competition for homes, providing a reprieve for some prospective buyers."
Zoom out: Across the U.S., buyers need 34% more income to afford a home.