Say Goodbye to Cheap Housing in Texas: 4 Major Lone Star Cities on the Rise
If you’re thinking about buying property in Austin, Dallas, Fort Worth, or San Antonio, you’ll need much deeper pockets than you did less than a decade ago. According to the Housing Opportunity Index published by the National Association of Home Builders/Wells Fargo, less than 33% of homes in those metros are considered affordable (down from 60% in 2014).
See: 10 US Cities With Plenty of Jobs and Cheap Housing
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What Happened?
Real estate prices in these areas have skyrocketed largely because demand has exceeded supply. Since many professionals can work remotely, people are relocating to Texas in record numbers. Plus, because the state imposed fewer COVID-19 restrictions, it experienced a 60% increase in migration during the 15 months immediately after the pandemic started.
In addition, while the Federal Reserve doesn’t set mortgage interest rates, the institution’s recent rate hikes have indirectly made it much more expensive to finance a home. The Fed bumped the rate by 4.75 percentage points between March 2022 and March 2023 and — on May 3 — enacted a further 25 basis point hike.
Here’s an example of how these factors are playing out:
According to the Home Ownership Affordability Monitor from the Federal Reserve Bank of Atlanta, the median home price in the Austin-Round Rock area in February 2023 was about $440,000. The accompanying monthly mortgage payment was roughly $3,450.
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Just five years ago, in February 2018, the numbers were approximately $284,000 and $1,980, respectively. Such a massive price jump, unfortunately, puts homeownership beyond the grasp of many hopeful buyers.
There’s Good News For The Texas Housing Market
Fortunately, experts don’t expect to see a rash of foreclosures in the state. In general, current Texas homeowners are in a much better place than they were during the Great Recession 15 years ago. They tend to have a decent amount of equity, a solid credit profile and a mortgage with a low interest rate.
Plus, while some regions of Texas may be heading towards a housing crisis, 14 out of 50 of the best places to buy a home for under $250,000 are in the Lone Star state, including:
Abilene.
Amarillo.
Bryan.
Corpus Christi.
El Paso.
Killeen.
Laredo.
Longview.
Lubbock.
McAllen.
Odessa.
Pasadena.
Tyler.
Wichita Falls.
So, if you want to reside in Texas on a budget, know it’s possible for many homebuyers. Plus, even the pricier metros are still cheaper than many coastal cities in the nation.
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This article originally appeared on GOBankingRates.com: Say Goodbye to Cheap Housing in Texas: 4 Major Lone Star Cities on the Rise
