DALLAS — Editor's note: This article was originally published in the Dallas Business Journal here.
Dallas is the 23rd least affordable housing market in the nation’s 100 largest cities, and the possibility of home ownership for buyers with an average-sized paycheck is fading, according to a new study.
A family making Dallas’ average household income of $63,781 would have to spend 41.48% of their monthly paycheck on housing costs to afford a median-priced home, according to the just released May Affordability Index by home listing platform RealtyHop.
Dallas became 1.63% less affordable this month, according to the study.
That puts Dallas among the 25 most unaffordable housing markets nationwide — cities where homeowners direct over 40% of their income toward homeownership.
Fort Worth is more affordable than Dallas, ranking 46th on the list when both housing costs and incomes are factored in. A family making Fort Worth’s average household income of $75,434 would have to spend 35.77% of their yearly household income on homeownership costs, according to the RealtyHop index.
The median home price in Dallas in May is $375,000 and the estimated monthly mortgage payment and taxes total $2,205. The median home price in Fort Worth in May is $365,000 and the estimated monthly mortgage payment and taxes total $2,248.
Sixty-one of the 100 U.S. cities in the study got less affordable in May, while 34 became more affordable and five saw no change, the study found.
Homeowners in 66 of the 100 major cities must spend over 30% of their annual income on homeownership. That's one city less than last month.
Miami is the least affordable housing market this month. The median list price for a home decreased to $585,000, and Miami homeowners can expect to spend 79.92% of their monthly income on the cost of homeownership.
Los Angeles remains the second most unaffordable housing market in the nation. Prospective buyers earning a median household income of $73,432 in L.A. should expect to spend $4,742 monthly on mortgage and property tax payments. That’s 77.5% of the median income going for housing each month.
The only Texas city less affordable than Dallas is Austin. A family making Austin’s average household income of $86,823 would have to spend 43.68% of their paycheck on housing costs, according to the study. The median May home price in Austin is $537,145, and the estimated monthly mortgage and taxes total $3,160.
Prices in the Dallas-Fort Worth housing market are among the fastest growing in the country, squeezing out buyers with lower or even average incomes.
The value of a typical home in the Dallas-Fort Worth metro area stands at just over $362,000, up 38% since 2020, according Zillow.
Higher interest rates have compounded the problem of higher prices for prospective buyers.
Through March, monthly mortgage costs for a typical home in DFW (with a 20% down payment) are $1,859, up 45% year over year, according to Zillow.