Houstonians need an annual salary of at least $47,000 to buy a single-family home in greater Houston, according to data from a local Keller Williams Memorial Realtor.
Paige Martin and her team calculated the average annual salary needed to purchase a home in over 50 Houston-area neighborhoods based on 2017 median housing price data and assuming a 28 percent monthly principal, interest, taxes and insurance cost, which included a 20 percent down payment.
Click through the slideshow to see the average salary needed and median 2017 home price for 53 local neighborhoods ranked in descending order.
According to the analysis, the market area that requires the largest salary is River Oaks. Homeowners should be earning at least $515,646 to afford the neighborhood’s median-price home of $1.95 million.
However, in 2017 River Oaks did experience a 10 percent decrease in average sales price, year over year, according to data from the Houston Association of Realtors. Despite this, Martin predicted in January that the neighborhood — and four others — could experience a double-digit increase in median sales price per square foot in 2018.
Not surprisingly, River Oaks is out of the price range for most Houstonians. According to 2016 numbers from the U.S. Census American Community Survey, the median household income in the Houston metropolitan statistical area is $61,708. Based on Martin’s numbers, that means most residents can afford to buy a house in only seven of the neighborhoods in the analysis.
Paige Martin, broker associate with Keller Williams Memorial
The most-affordable option is Northwest Houston. Homeowners should earn at least $47,453 to afford a $179,4560 home, the median price in that submarket. Several more northwest neighborhoods require a salary of less than $60,000: Copperfield Area, Eldridge North and Jersey Village.
Martin said in an email that the northwest region has historically been more affordable and has helped provide the overall Houston market with less expensive housing options. Although this area’s overall appreciation has not increased at the same rates as neighborhoods closer to major job centers such as downtown, the Texas Medical Center or the Galleria, it remains a great option for those looking to buy into the market at lesser prices.
Houston — like many other Texas cities — is known for being an affordable metro, but the cost of living is increasing, according to experts at a March 27 affordable housing panel.
Between 1990 and 2015, median incomes went up 120 percent, while inflation rose 87 percent, food prices increased about 89 percent, college tuition jumped 280 percent and the median price of a home in Houston went up 370 percent, Stephan Fairfield, CEO of Covenant Community Capital, a nonprofit capital investment firm, said at the event.
"The elephant in the room is how much families pay for housing," he said.