In North Texas, owning a home is an expensive proposition. According to a report from real estate data firm ATTOM (via The Dallas Business Journal), a larger salary percentage now goes to home ownership.
For example, 44.1% of median yearly wages go to home ownership in Collin County. (According to another report, Collin County has become “unaffordable” and homes 60% of income.) During the second quarter, the median home price in Collin County was $525,000, while the median wage was $77,766. As DBJ explains, the situation is worsening because home prices are up 21.7% year on year, but salaries only increased by 6.1%.
In comparison, the median wage in Dallas is $78,910, but the median second-quarter home sale price was $363,287. Furthermore, Dallas wages are growing at 5.3% year on year, but home prices increase by 19.8% in 2021.
“Extraordinarily low levels of homes for sale combined with strong demand have caused home prices to soar over the last few years,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “But homes remained relatively affordable due to historically low mortgage rates and rising wages. With interest rates almost doubling, homebuyers are faced with monthly mortgage payments that are between 40 and 50 percent higher than they were a year ago – payments that many prospective buyers simply can’t afford.”
What’s more, buying a home in North Texas now requires even more money. “As mortgage interest rates increase, the total monthly mortgage payment also increases,” said assistant research economist Dr. Clare Losey of TRERC in an official statement released in May 2022. “This increases the required income to qualify for a mortgage loan. In other words, as mortgage interest rates increase, purchasing power declines and households must earn more money to purchase the same-priced home.”
It’s not only home ownership that is taking a chunk of wages. As Local Profile previously reported, renting does, too.