Homebuying power plummets in Houston
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Houstonians' homebuying power has seen the second-largest decline among major Texas cities in the past 50 years, according to an Axios analysis of a RealtyHop study.
Why it matters: While housing inventory is finally starting to increase in Houston after years of fewer buying options, buying a house is far less accessible today than it was for previous generations.
State of play: In February 2022, there were slightly fewer than 11,000 active listings in the metro. This May, there were nearly 24,000 listings, per Realtor.com data compiled by the Federal Reserve Bank of St. Louis.
Yes, but: Homes are still drastically more expensive. The average price of a single-family home in greater Houston was $437,198 in April, up 4.6% from April 2023, per the Houston Association of Realtors.
- The median price increased to $340,000, up 3% from last year.
Context: Homebuying power in Houston decreased 57.3% from 1970 to 2022, per the Axios analysis.
- Homebuying power is the ratio of annual income to the average house price in 1970 (when boomers started buying starter homes) compared with 2022.
By the numbers: In 1970, a house in Houston was $14,400 and the median income was $9,876. In 2022, the median income was $68,832 and a house was $235,000.
Reality check: Mortgage rates were in the double digits in the '70s and '80s. Today they're hovering around 7%.
Zoom out: The largest affordability gaps are along the West Coast, with all five of the least affordable cities being in California, per Axios' Rahul Mukherjee's analysis.
- The Midwest has remained the most affordable region for homebuyers.
The intrigue: Of the 117 cities included in the study, Detroit is the only one where buying is easier today than it was in 1970.
The bottom line: Younger generations are spending a larger portion of their income on housing, whether buying or renting.