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Texas Housing Affordability OutlookTexas Housing Affordability OutlookClare Losey, Harold D. Hunt, and Reece Neathery2022-08-01T05:00:00Ztechnical-report
Residential

Purchase Af​fordability

The second quarter saw an uptick in both the median and first-quartile sales prices for Texas (Figure 1).1 The year-over-year (YOY) growth in the state's median and first-quartile sales prices measured a robust 16.4 and 13.6 percent, respectively (Table 1). However, while still significantly higher than average YOY growth, YOY growth for 2Q2022 measured lower than that of 2Q2021. The median sales price measured $355,000; the first-quartile sales price, $250,000.

Meanwhile, following years of generally sluggish growth, family income increased considerably. From 2021 to 2022, median family income in Texas increased 13.6 percent (Table 2). However, as long as the rise in home prices continues to outpace the increase in income, purchase affordability, or the ability of a household to buy a home, will continue to diminish.




At the same time, mortgage interest rates ticked upward, averaging 5.27 percent in 2Q2022 (Figure 2). All other things being equal, lower (higher) mortgage interest rates translate into lower (higher) monthly mortgage payments and ease (diminish) purchase affordability. The Federal Reserve is widely anticipated to continue to raise interest rates over the near-term to reduce inflationary pressures, which will likely prompt additional increases in mortgage interest rates. The average rate on the 30-year fixed-rate mortgage increased nearly 3 percentage points in the first half of 2022. For more information on the effect of mortgage interest rates on purchase affordability, see "How Higher Interest Rates Affect Homebuying."


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 1 The first quartile reflects the lowest-priced 25 percent of homes sold in a particular geography. The first-quartile sales price represents the highest home price among those lowest-priced 25 percent of homes sold. If the price of the lowest 25 percent of homes sold ranges from $100,000 to $150,000, then the first-quartile sales price would be $150,000.


To read this report in its entirety, download the pdf.

Previous reports:

2022: 1Q2022​

2021: 4Q2021

Digital and Print2336https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Affordability-2336 https://assets.recenter.tamu.edu/Documents/Articles/2336.pdf

 

 

Texas Housing Affordability OutlookTexas Housing Affordability OutlookResidential
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