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Collin County makes national list as ‘unaffordable’ for home ownership

Add Collin County to the list of places where home ownership is no longer affordable.
Credit: WFAA

COLLIN COUNTY, Texas — Add Collin County in North Texas to the list of places where home ownership is no longer affordable.

With a median home price of $403,500 and a median income of $50,681, houses in the county north of Dallas are, by and large, no longer affordable for folks who already live there, according to an analysis by personal finance website MoneyGeek. 

Housing prices in Collin County — home to cities including Plano, Frisco, McKinney and Prosper — are 27% higher than they were three years ago, and home costs as a percentage of income are 60%.

MoneyGeek analyzed changes in homeownership costs, home price appreciation and median incomes from 2019 to 2022 to reveal 26 counties in the U.S. where the housing market is no longer affordable.

As a general rule, MoneyGeek found outlying counties of high-growth metros have become unaffordable. In Texas, that played out in the Austin area as well as Dallas-Fort Worth.

Nationwide, trends of low home inventories, high prices, higher mortgage rates and unfavorable income-to-housing cost ratios are challenging prospective homebuyers. In many cases, these markets are pricing locals out of their communities.

In Central Texas, Travis and Williamson counties made MoneyGeek’s list of places that have become unaffordable over the past three years due to a run-up in home prices.

In Travis County, home to Austin, house prices have appreciated 50.1% in the past three years, raising the median price to $456,690. The median income is $43,376. Home costs in Travis County are 78% of income.

Just to the north, in Williamson County, home prices have appreciated 58% in the last three years to a median of $378,412. The median income is $41,446, making housing costs in Williamson County 69% of income.

Another study, this one by Zillow, found the rapid hikes in mortgage rates in recent weeks have put a big dent in housing affordability in Dallas-Fort Worth.

Monthly mortgage payments on a new mortgage on a typical home in DFW are up 164% since last May, Zillow’s analysis found. The difference in payments when buying a typical home at a 6% rate vs. a 3% rate is $556 using Zillow’s Home Value Index for DFW.

Higher mortgage costs should calm demand and result in some “much-needed rebalancing” of the housing market, Zillow senior economist Matthew Speakman said.

“The combination of the recent record-breaking pace of home value growth and suddenly high mortgage rates has severely worsened housing affordability,” he said. “Our affordability measure shows that a monthly mortgage payment on the nation’s typical home makes up a greater share of median homeowner income than at any time since at least 2007, and possibly much longer.”

Zillow has made a downward adjustment to its forecast for one-year home price appreciation. The Zillow Home Value Index is expected to increase 9.7% nationwide in the 12 months ending in May 2023, compared to last month’s forecast of 11.6% in the 12 months ending April 2023.

This story originally appeared in the Dallas Business Journal.

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