Real Estate Report

Buying a home is cheaper than renting — especially in Dallas

Exterior of 881 Berkinshire Dr. in Dallas

Buying beats renting in every Texas metro.

Photo courtesy of Briggs Freeman Sotheby's

Saving for homeownership is no easy feat, but the financial benefits typically outweigh the initial cutbacks. With today’s high rental costs and low interest rates, prospective buyers might consider exercising their savings funds sooner rather than later. According to a new study from Trulia, buying a home is currently 37.7 percent cheaper than renting from a national perspective.

Over the past year, the national average interest rate dropped from 3.9 to 3.7 percent. And despite the fact that current low interest rates are likely to rise toward the end of the year, not every renter is rushing to gather a down payment. The chief deterrent is rising home prices, which grew 5.9 percent over the last year compared to a softer 3.5 percent jump in rent prices.

Although prices dissuade many would-be buyers, purchasing a home offers the “best deal” seen since 2012. In each of the top 100 metros, buying is more cost-effective than renting, ranging between a 20 and 50 percent difference in long-term costs. To ease your concerns regarding mortgage rates, the Federal Open Market Committee (FOMC), commonly known as the Fed, would have to at least double rates for the scale to tip in favor of renting. On every front, buying makes the most sense — especially in the South.

Regionally, the South offers the greatest financial benefit of homeownership with eight out of the top 10 best buying metros, including Houston.

Houston’s median home value this fall is $176,513, while the median rent is $1,575 per month, which means buying homes in Houston is 52.9 percent cheaper than renting them. In order for the financials to shift in favor of renting, the median home price in Houston must reach $405,980, while interest rates would have to rise to 14.2 percent. Although neither scenario is likely to occur soon, home prices have a much shorter distance to go compared to the massive hike interest rates must make to tip the scale.

San Antonio is just shy of the top 10 metros where buying is cheaper than renting, at a 50 percent cost difference benefiting homeownership. The median San Antonio home costs $155,273, compared to a median rent of $1,350 per month. In order for buying to become less advantageous than renting in San Antonio, home prices would have to jump to a median $336,942, while interest rates would have to rise to 13.3 percent.

Buying a home in Fort Worth costs a median $174,171, while renting costs $1,450 per month, making homeownership 46.4 percent less expensive than leasing. Buying would only become less advantageous if home prices rose to $346,600 or interest rates jumped to 12.3 percent.

Although Dallas homes share a slightly more expensive median of $215,053, buying is still 47.4 percent cheaper than the median apartment cost of $1,650 per month. Residential real estate prices in Dallas would have to jump to $434,407 in order for homeownership to be more expensive. Meanwhile, interest rates would have to increase to 11.9 percent for this move to occur.

Austin is one of Texas’ pricier metros, with a median home value of $258,297 and a median rent of $1,700 per month. Nonetheless, buying a home in Austin is over 40 percent cheaper than renting. In order for renting to economically outweigh buying, home prices would need to go up to a median $452,020 and interest rates would have to jump to 9.7 percent.

If homeownership is on the horizon but you haven’t quite amassed a 20 percent down payment and closing costs, don’t fear. Interest rates have a long way to go before they tip the scales toward renting. Keep in mind, however, that shifts in home prices could have the greatest impact given the current market. Planning to delay in the hopes of a market slowdown might hurt more than help, especially with home prices climbing nationally.

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This is the income you need to buy a starter home in Dallas right now

Photo by Zac Gudakov on Unsplash

Dallas and Austin lead the nation for improving starter-home affordability.

A new housing affordability report shows Dallas is among the nation's top metros for improving starter-home affordability. First-time buyers are finally catching a small break, with the income needed to purchase a median-priced starter home falling in 2026.

Dallas residents need to earn $83,096 to afford a median-priced home in the metro area, or 5.1 percent less than they did last year, the Redfin report found.

Dallas had the third-biggest decline in the income needed to afford a starter home out of the 50 U.S. metros analyzed in the report. Redfin also determined that all starter home listings in Dallas are "affordable" based on the city's median household income — which the report estimates at $103,144.

Dallas still has a far higher income required to afford a starter home compared to the national average, but affordability is improving slightly across the board. Americans need to make $70,693 to afford the typical starter home, according to the report's findings.

"The income needed to buy a starter home is declining while earnings are rising," the report said. "The typical American household earns an estimated $87,599, about $17,000 more than what’s needed to buy the median-priced U.S. starter home. That gap is widening: A year ago, the typical American earned roughly $12,500 more than they needed to buy a starter home."

Still, starter home affordability is "still often out of reach" for first-time homebuyers in expensive real estate markets due to "near high record" sale prices and soaring mortgage rates, the study said.

In neighboring Fort Worth, residents only need to make $77,886 to afford a starter home — an attainable milestone based on the city's estimated median household income of $93,102. Fort Worth ranks fourth nationwide for its year-over-year improvement in starter home affordability.

For additional comparison, this is the income needed to afford a starter home in other major Texas metros:

Austin – $92,607 (down 6.1 percent)
Houston – $70,384 (down 4 percent)
San Antonio – $62,859 (down 3.7 percent)

Unfortunately, affording a home in the overall housing market is further straining Americans' wallets. American households need to make just under $110,000 afford the typical U.S. home, but Redfin's evaluation found the typical household makes about $22,000 less than that.

"The discrepancy is partly because the overall market is driven by outsized price increases in the luxury segment, and outsized price increases in places like San Francisco and West Palm Beach, where affluent buyers are active," the report said. "At the same time, some would-be buyers of starter homes are pulling back because they typically earn less money and are more sensitive to affordability pressures."

The top 10 U.S. metros with the biggest declines in the income required to afford the typical starter home are:

No. 1 – Austin, Texas
No. 2 – Oakland, California
No. 3 – Dallas, Texas
No. 4 – Fort Worth, Texas
No. 5 – Denver, Colorado
No. 6 – San Francisco, California
No. 7 – Phoenix, Arizona
No. 8 – Las Vegas, Nevada
No. 9 – Houston, Texas
No. 10 – Los Angeles, California

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