Housing Affordability in Texas

September 14, 2018 | by Laura Ross

Categories: First Time Buyer, Homeownership

How affordable is it to live in Texas?

The Texas Housing Affordability Index (THAI) is a statistic compiled quarterly by the Real Estate Center at Texas A&M University that measures how affordable it is to purchase a home in different cities and counties around the state.

The study compares the median household income with the income required to purchase a median-priced home in order to see how closely they line up. A THAI of 1.0 means the median family income is equal to the income needed to afford a median-priced house. As the THAI number goes up, households earning the median family income are increasingly able to afford a median-priced home.  

How Affordability is Calculated

When calculating the affordability of an area, several factors are considered. The THAI examines affordability for all home buyers and first time buyers separately. For all buyers, a down payment of 20% with a qualifying ratio of 25% is considered when comparing the median household income to median-home prices. For first time buyers, a down payment of 10% with a qualifying ratio of 25% is used to calculate affordability.

The Highs and Lows of Housing Affordability Across the State

The most recent index for the second quarter of 2018 found that the overall housing affordability in Texas was positive for all home buyers and first time buyers. The THAI for all buyers was 1.45, meaning a household earning the median-income with a down payment of 20 percent, actually earns 45% more than the income required to purchase a median-priced home. For first time home buyers with a down payment equaling 10% of the home price, it’s a little more even with a THAI of 1.13. First time home buyers make 13% more than the income required to purchase a median-priced home.

When broken out into counties and cities, Wichita Falls found itself at the top of the list with the highest THAI of 2.44 for all buyers. That means the median household income for the area is well over twice what is required to purchase a median-priced home. Wichita Falls also topped the list for first time buyers, with a THAI of 1.9.

Below is a list of where some of the major cities and metro areas fell on the list:

City or Metro Area Affordability Rating -
All Buyers
Affordability Rating-
First Time Buyers
Houston/The Woodlands/Sugarland 1.58 1.23
San Antonio/New Braunfels 1.46 1.14
Austin/Round Rock 1.36 1.06
Dallas/Plano/Irving 1.31 1.02

Sadly, affordability across the state is going down. While the THAI in Texas is 1.45 now, it was slightly higher in 2017 at 1.54 and even higher still in 2016 at 1.66. Most cities and counties across Texas are seeing the same decline in affordability with only a few exceptions.

How TSAHC Helps Texans Purchase a Home

Programs like TSAHC’s down payment assistance (DPA) program help buyers across Texas more easily afford to purchase a home. At TSAHC, we offer several different rate and DPA options, as well as a mortgage tax credit program for first time buyers. To find out if you’re eligible, take our eligibility quiz.

On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.


Adam Reed

Affordable housing is so important! People need to have a roof over their heads, and it is so important that everyone finds a good home.

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