Austin may soon be least affordable place outside California to own a home


AUSTIN (KXAN/Austin Business Journal) — Experts predict soon Austin could be the least affordable place outside California to own a home.

An outlook by online real estate company Zillow suggests if current trends continue, Austin homeowners will spend just over 30% of their household’s monthly income on a mortgage by the end of the year. Anything above 30% is considered “housing burdened,” and the outlook is assuming mortgage rates remain steady. Some experts think mortgage rates will rise with inflation in the next few months.

While Austin is currently more affordable than markets in Miami, Seattle and New York City, Zillow is projecting all three typically expensive markets will be under the 30% mark by the end of the year.

“We have seen an increase in median home prices year over year, in the 30 to 40% range across our region,” said Jeni Williams, Austin Board of Realtors government affairs deputy director.

She said Zillow’s projects reflect what they’ve been seeing for the past few months.

“We’ve also seen inventory become increasingly scarce as a result of the fact that demand has increased so much,” Williams said. “And listings have also increased but unfortunately are not keeping up with that demand.”

“It’s definitely more limited than it used to be,” said Clair Daly, who has been looking for a home in the north Austin/Pflugerville area since January.

She considers herself lucky; she’s staying at her family’s AirBnb while she looks for a home amid tight supply and rising costs.

“I want to buy a home now, but now it’s the most expensive it’s ever been, but in another year, it’s going to be the most expensive it’s ever been. So now really is kind of the time to jump in,” Daly said.

She said she is seeing some listings in her budget, but they go quick.

“It’s just the matter of like, being fast and having someone who can kind of give you that heads up that something’s coming like in this area,” Daly said.

She works at Twelve Rivers Realty and said having a good realtor has been key to putting in offers on two homes.

Affordable housing spending

This week, city council members allocated about $79 million toward affordable housing.

A city spokesperson said the funding will go toward four Housing and Planning Department programs for both renters and buyers: rental assistance, ownership assistance, nonprofit contracts and land acquisitions.

“There is no silver bullet to address our overall housing situation here in Austin,” said Williams.

Williams said the funding targets mostly low to moderate income families and doesn’t address affordability or supply for everyone, like median income households.

“We are encouraging city leaders to take an ‘all of the above’ approach to focus on allowing the development review process to be more streamlined, effective and efficient,” she said.

Although policy changes and funding won’t change the Austin metro’s trend by the end of the year, she said it will go a long way.

To read more about the subject, check out the Austin Business Journal’s website.

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