Home News Study says buyers need 40% more income to afford a D-FW home than last year

Study says buyers need 40% more income to afford a D-FW home than last year

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Texas squeeze: A series investigating the high costs of high growth in North Texas.

With soaring house prices Mortgage rates, Recent Redfin survey Dallas / Fort Worth homebuyers say they need to earn 40% more than last year to pay their monthly mortgages.

According to Redfin, Dallas buyers had to pay an annual salary of $ 77,768 to make a monthly payment at a home with a median of $ 420,000 in March. That’s 39.5%, or $ 22,027, more than the company said it needed to buy a median home in March 2021.

In the Fort Worth region, buyers had to earn $ 65,117 to pay for a home with a median of $ 352,000. That was 40.3%, or $ 18,665, more than a year ago.

Meanwhile, Dallas / Fort Worth wages haven’t risen by as much as 40%. Workers earned only 4.5% more in March than they did a year ago. According to the US Bureau of Labor Statistics.

Redfin considers monthly mortgage payments affordable if homeowners spend less than 30% of their income on their homes. The report assumes that the buyer paid a 5% down payment and the calculation does not include taxes and insurance.

Median home prices in the Dallas region have risen 22% since March 2021, with monthly payments rising from $ 1,394 to $ 1,944. In the Fort Worth region, median home prices rose 22.6% and monthly payments rose from $ 1,161 to $ 1,629.

Dana Anderson of Redfin saw the most dramatic changes in the affordability of homes in the city of Sunbelt, as costs soared due to high demand from people traveling from outside the town.

“Buyers are attracted to the Sunbelt locale, partly because it’s relatively affordable compared to expensive coastal job centers, but as housing prices rise as a result, it’s going to be popular in the future. Can be reduced, “Anderson wrote.

According to another report from the Texas Real Estate Research Center at Texas A & M University, the income required to buy a $ 229,000 home (the price the center has determined to be affordable for first-time buyers) is an increase in mortgages. Has increased by $ 10,000 since the beginning of the year. price.

The average interest rate on 30-year fixed rate mortgages was 5.09% as of June 2, a slight decrease from the previous week, but still significantly higher than 2.99% a year ago.

“As interest rates on mortgages rise, so do the total monthly mortgage payments,” said Crealosis, assistant research economist at Texas A & M. “This will increase the income required to qualify for a mortgage. In other words, higher mortgage rates will reduce purchasing power and households will spend more money to buy homes of the same price. I need to earn. “

The higher costs of owning a home are beginning to impact sales activities. April home show schedules are down 9% year-on-year. Economists are expecting House price rise slows Demand remains high during the year as supply has declined significantly over the past few years.

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