Houston housing market not so hot for first-time homebuyers

HOUSTON – Houston’s housing market is ranked among the least affordable for first-time homebuyers, according to a new report by WalletHub.

WalletHub analyzed housing markets in the 300 largest cities nationally, looking at 17 metrics such as median household income adjusted for cost of living and median home prices.

The website then ranked the cities based on the affordability of homes, the strength of the local real estate market and residents’ quality of life.

Houston’s strong real estate market was ranked No. 1 in the country. This was calculated based on factors such as median home value, average home square footage and median home price appreciation.

However, Houston ranked No. 273 for affordability of homes for first-time homebuyers. Here are two major reasons contributing to Houston’s lack of affordable housing, according to a recent Metrostudy report.

• Cost of land, construction materials and labor are skyrocketing, causing home builders to construct more expensive homes to maintain their profit margins.
   
• Houston’s historically low inventory of homes, coupled with its job growth and subsequent population boom, is driving up home prices.

In Houston, just 9.8 percent of new home starts were priced below $150,000 during first quarter 2014. That is down from 19.1 percent over the same time period in 2012. Meanwhile, a little more than a third of home starts in 1Q 2014 were priced above $300,000.

Read more at the Houston Business Journal.