Since the Pandemic, the Houston housing market is lacking affordability and that makes the American dream of homeownership feel like a far-off distant fantasy and something not attainable by most homebuyers.
Bankrate’s Real Estate Data Analyst, Alex Gailey, says roughly 86 percent of homes on the market aren’t affordable. “What we’re seeing in the supply data that if you’re a typical household in the Houston metro area only a sliver of the market is affordable to you and that’s when home ownership starts to feel less like a middle-class milestone and more like a luxury.” She said.
Gailey says a typical household in the area can only afford 20-30 percent of the local home prices, which is a sign home prices are out of sync with wages in the area.
In addition, Houston has the 3rd highest number of D listings, which are homes that were once for sale on the market, are removed either because they are sold, or because the seller wasn’t satisfied with the offers.
“That just shows if you look under the hood, it shows a market that is moving into a better balance into the future. We are seeing that wages are playing catch up, so it’s going to take more before there is more stability in the market. It’s been a long road ahead for Houston and really the country as far as the housing market.” Gailey explained.
She said there is still an affordability crunch in the housing market. Once a market reaches 80 percent of unaffordability, she says that speaks to a gap between wages and housing prices.
She says since the Pandemic home prices across the country are up 50 percent and she says wages have only increased on a national scale by 21 percent. People across the country and Houston are feeling this really raw feeling of not being able to achieve the dream of homeownership and this is often due to supply not meeting demand.
Gailey adds a common myth people is that you must put down 20 percent or more to qualify for a down payment. The housing expert says 1st time buyers should explore and do their research, there are local and state level first time buyer programs that can offer lower down payment opportunities, as low as 3-5 percent. She says to broaden your location search and stay open to different types of homes and of course, know what you can afford. The problem is a lot of people aren’t even aware these programs exist.