affordability gaps
Dallas buyers must earn this much more to afford a starter home in 2023
This charming home at 1317 Casa Vale Dr. in Dallas is on the market for $250,000.
A new income analysis by online real estate brokerage Redfin has revealed just how much more a potential homeowner needs to make this year to afford a "starter home" in Dallas, a concept that's becoming seemingly less attainable with rising mortgage rates and increased competition among buyers.
The report revealed that first-time homebuyers need to earn $72,885 annually to afford a Dallas home in 2023, which is 10.6 percent more income than was required in 2022.
It's also $8,482 above the national average. According to Redfin, the average salary needed for a typical starter home in the United States is $64,403, about 13 percent more than a year ago.
These findings further confirm that affordability is one of the biggest struggles for potential buyers in the current real estate market.
What was considered a generous salary to afford a home in Dallas a year ago is no longer the case, as median sale prices are sitting at $275,000, and median mortgage payments are about $1,822 a month, the report said. However, the analysis indicated home sales in the city have risen 2.5 percent since this time last year.
Redfin senior economist Sheharyar Bokhari said in the report that it's a "wild goose chase" for homebuyers seeking their first home in the current market.
"The most affordable homes for sale are no longer affordable to people with lower budgets due to the combination of rising prices and rising rates," he said. "That’s locking many Americans out of the housing market altogether, preventing them from building equity and ultimately building lasting wealth. People who are already homeowners are sitting pretty, comparatively, because most of them have benefited from home values soaring over the last few years."
Bokhari predicted the wealth gap between current and potential owners could become "even more drastic" if current trends continue.
Buyers looking elsewhere in the Metroplex might find some success. Even though the income necessary to afford a Fort Worth home has risen by 14.4 percent, that only amounts to $64,933.
Elsewhere in Texas, a first-time homebuyer would need to make $57,513 to afford a home in Houston, which is nearly 14 percent more than in 2022. San Antonio saw the highest percentage increase in income necessary to afford a home, at 18.7 percent, with buyers needing to make $55,657. In Austin, potential homeowners saw a 3.3 percent decrease in income needed to afford a home, but it's still the highest income required out of all Texas cities in the report: $92,057.
The full report can be found on redfin.com.
