The report states just 38% of Houston households could afford a median-priced home as of the fourth quarter of 2023.
As a result, some potential buyers have postponed their plans and turned to the rental market instead. This shift has led to high demand and rising rental rates for single-family homes, according to the release.
The details
According to HAR's Rental Affordability Index, rent for single-family homes rose across the Houston metro area in the fourth quarter of 2023.
- The median monthly rent increased by 2.6% year over year to $2,000 from $1,950 in 2022.
- Houston households required a yearly income of $80,000 to afford the median rent price on a home.
- Higher interest rates led to a 4.7% rise in the annual income required to purchase a median-priced home compared to 2022, increasing from $94,000 to $98,400.
Affordability varied across different counties within the Houston metro area, with some areas being more affordable than others, according to the release.The specifics
In the fourth quarter of 2023, the median home price in the Houston area decreased by 0.4% to $336,600, according to the release.
Monthly mortgage payments on a 30-year fixed-rate loan, including taxes and insurance, rose to $2,460 from $2,350 year over year, the release states. The average interest rate hit a 20-year high of 7.3% compared to 6.66% in the fourth quarter of 2022.
What the experts say
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“Elevated mortgage rates created challenges for prospective homebuyers throughout 2023, and this prompted many consumers to postpone their homebuying plans and turn to the rental market,” HAR Chair Thomas Mouton said in the release. “As home prices moderate and interest rates ease, we anticipate more favorable market conditions for homebuyers throughout 2024.”
Rental affordability also faced challenges, according to the release. Rental affordability decreased from 48% in the fourth quarter of 2022 to 47% in 2023. The minimum annual income needed to rent a home was $80,000.
