Even in a weak local market, you still need to earn well above $100,000.
Austin, Texas is a city rich in culture, activities, outdoor recreation, and incredible food. Not only is Austin a popular place to live, it’s also home to a fairly competitive real estate market that has undergone significant changes in recent years.
For many, Buying a house in Austin It’s a dream come true, but it’s also important to understand how it will affect your finances.From your down payment to your monthly mortgage payments, there’s a lot to know before buying your first home
So whether you already live in ATX or are planning to move to the area, here’s a breakdown of the income you’ll need to buy your first home in Austin.
Check Our original report Conduct detailed national analysis.
How much income do you need to buy a starter home in Austin?
The median sales price for a new home in Austin is $330,000. To be affordable, first-time homebuyers in Austin should earn $118,201 per year, a 0.7% increase from 2023.However, the average income in Austin is $104,076, which means Ordinary residents often cannot afford starter homes.
As expected, entry-level homes in Austin are more affordable than average homes (all price ranges combined; see methodology for details). To afford any moderately priced home in the area, You need to earn $126,208 (As of October 2023).
Nationwide, you need an income of $75,849 to buy a typical starter home, which sells for an average of $240,000. The average household income in the United States is estimated at $84,072.
A First-Time Home Buyer’s Guide to the Austin Real Estate Market
Austin’s real estate market has had its ups and downs over the past four years, growing rapidly and then declining dramatically.
At the beginning of the epidemic, the city was one of the most popular immigration destinations for coastal homebuyers. Sufficient sunshine and economical.In fact, the city is downright Most popular subway This situation continues into 2021 for homebuyers who relocated at the end of 2020.
However, this rapid rise price some people exit the market, causing house prices to fall.People are also no longer considering moving to the city, and by the end of 2023, Austin lost homebuyer This is the first time in recorded history.
As of April 2024, home prices were $550,000, down 17.8% from their peak in May 2022.The Austin-San Antonio metropolitan area is still expected to grow to By 2050 there will be 8.3 million people.
The surrounding area of Texas’ capital offers many amenities and attractions, such as the Bullock Texas Historical Museum, Barton Springs Pool, and Castle Mountain.Some Austin’s popular neighborhoods include crestview, Alandaleand southern congress.
How much is a typical down payment in Austin?
Here are some common down payment amounts for a typical $330,000 starter home in Austin:
| down payment ratio | Down payment amount |
| 3% down payment | $9,900 |
| Down payment 3.5% | $11,550 |
| 5% down payment | $16,500 |
| 10% down payment | $33,000 |
| 15% down payment | $49,500 |
| 20% down payment | $66,000 |
Down payments can range from 0% to 100% of the total home price, depending on your budget, loan type and long-term priorities.While experts have historically recommended budgeting for a 20% down payment, rising housing costs and continued sluggish wage growth have led to 15% down payment becoming more and more common.
Some loan types allow lower down payment amounts.For example, a Federal Housing Administration (FHA) The loan only requires a down payment of 3.5%, and the minimum down payment for the loan is conventional loan It’s 3%. These amounts are typically based on your credit score, so buyers with higher credit scores may qualify for a lower down payment.
What is the typical mortgage payment for a new home in Austin?
The typical monthly mortgage payment for a starter home in Austin is $2,955. Assuming you pay 3.5% down, the interest rate is about 7%.
If this payment sounds too high, you might consider Rent an apartment in Austin. With the average rent at $2,216, this may be a better option when you’re saving up for a down payment on a home.You can also use Affordability Calculator Find out what you can afford based on your income and down payment.
What should you do next?
This is important to know if you’re buying your first home in Austin How much house can you afford?. Make the decision that’s best for you based on your annual income, credit score, current mortgage rates, and local market trends.
From there, a austin agent can help you through the entire home buying process and provide valuable local expertise.To learn more about how to buy a home, check out Redfin’s First Time Home Buyers Guide.
method
Redfin divides all U.S. properties into five categories based on Redfin’s estimates of the home’s market value. There are three equally sized tiers, as well as the bottom 5% and top 5% of the market. Redfin defines a “starter home” as one that sells for between 5% and 35% off red fin estimate layer.
We calculated the annual income needed to purchase a starter home, assuming buyers spent no more than 30% of their income on housing payments. Home payment calculations assume buyers put down a 3.5% down payment and take into account one month’s median sales price and average mortgage rates.
National income data are adjusted for inflation using the Consumer Price Index. Earnings in 2024 are estimated based on U.S. Census Bureau (ACS) projections of median household income in 2022 using a 12-month moving average of nominal wage growth. The ratio is compiled from the Current Population Survey and reported by the Federal Reserve Bank of Atlanta.
We assume that the home payment includes mortgage principal, interest, property taxes, homeowners insurance, and mortgage insurance (if applicable).
All data is from February 2024 unless otherwise stated.
