Dallas and Fort Worth may be less than 50 miles from each other, but they couldn't be further apart when it comes to housing affordability.
According to a new study, Dallas ranks as the least affordable housing market among the state’s five largest cities, while Fort Worth ranks as the most affordable. The study was done by Point2 Homes, a real estate search portal owned by Yardi Systems Inc., a provider of software for the real estate industry.
To come up with its ranking of housing affordability in North America’s 50 largest cities, Point2 Homes computed the home price-to-income ratio for each place. Based on the study’s findings, Dallas is considered a “severely unaffordable” housing market, whereas Fort Worth “stands out as one of the better choices” in Texas for housing affordability, Point2 Homes says.
“When looking at the raw numbers, Fort Worth has a higher median income than Dallas and also showcases the second lowest median home sale price in the state, after El Paso,” Point2 Homes says.
To measure affordability in each city, Point2 Homes calculated the affordability ratio, which is the median sale price of a home divided by the median annual income of a family.
“Essentially, the higher this ratio is, the more time it takes to pay off your house, and the wider the affordability gap in the housing market,” Point2 Homes says.
Here are the affordability ratios for the state’s five largest cities:
- Dallas — 6.6 (ranked 13th most unaffordable in the U.S.)
- Austin — 5.5 (ranked 18th most unaffordable in the U.S.)
- San Antonio — 4.7 (ranked 21st most unaffordable in the U.S.)
- Houston — 4.5 (ranked 22nd most unaffordable in the U.S.)
- Fort Worth — 4.0 (ranked 24th most unaffordable in the U.S.)