HOUSTON HOUSING COSTS EASE FOR THE FIRST TIME IN FOUR YEARS
Thirty-eight percent of Houston-area households could afford to buy a median-priced home in Q3 2024
HOUSTON — (November 7, 2024) — The Houston housing market experienced a positive shift in housing affordability for the first time since 2020, according to new data from the Houston Association of Realtors (HAR).
HAR's Housing Affordability Index shows that 38% of Houston-area households could afford to purchase a median-priced home in the third quarter of this year compared to 35% during the same time last year. This is the first year-over-year improvement of housing affordability since the second quarter of 2020. The increase is largely due to easing interest rates and moderating home prices.
The median home price in the Houston area edged up 0.8% to $348,200 in the third quarter. The monthly payment on a 30-year fixed-rate mortgage, including principal, taxes and insurance, was $2,460 compared to $2,620 a year ago. The average interest rate was 6.02% compared to 7.04% during the same time in 2023. Households needed to make a minimum annual income of $98,400 to buy a median-priced home, which is down 6.1% from a year ago.
In Texas, 41% of households could afford a typical home in the third quarter compared to 36% last year. A minimum annual income of $90,000 was needed to qualify for the purchase of a $343,640 statewide median-priced home.
The national median home price rose 3.1% year-over-year to $418,700, according to the latest data from the National Association of Realtors (NAR). During the third quarter, 37% of households nationwide could afford the median-priced home compared to 33% during the same time last year.
The chart below shows how the minimum annual household income needed to purchase a home has changed year-over-year.
“While it's encouraging to see housing affordability improve slightly, the dream of homeownership is still out of reach for the majority of households in the Houston area,” said HAR Chair Thomas Mouton of Century 21 Exclusive Properties. “It's important to work with a trusted REALTOR® to navigate the market and explore options like down payment assistance programs.”
Lease prices for a single-family home increased across most of the Houston area in the third quarter of 2024, according to HAR’s Rental Affordability Index, which measures the percentage of households that can afford to pay the median monthly rent for a single-family home. The average lease price for a single-family home rose 4.8% year-over-year to $2,200. Forty-three percent of households earned the minimum annual income of $88,000 needed to afford the median lease payment. This does not include the security deposit or cost of utilities.
The chart below shows how the median lease price for a single-family home has changed year-over-year.
Highlights from the Q3 2024 Housing & Rental Affordability Report:
• 38% of households in the Greater Houston area could afford a median-priced home in the third quarter of 2024, that is up from 35% during the same time last year.
• The median home price increased slightly, 0.8%, to $348,200 in the Houston area.
• The monthly mortgage payment on a 30-year fixed-rate loan, including principal, taxes and insurance, was $2,460 compared to $2,620 last year.
• Households needed to make a minimum annual income of $98,400 to buy a median-priced home, which is down 6.1%.
• The median lease price in the Houston area increased 4.8% year-over-year to $2,200.
For HAR’s full Housing and Rental Affordability Reports and data tables, click HERE.
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