We all know one of the first things to consider when thinking about buying a home is your current salary.

A recent article showed what it takes to buy a house in different markets across the US, and (for some Keep Austin Weird reason) it did not include Austin, TX.

One down-side to living in one of the coolest and classiest cities and no professional sports teams is that Austin rarely shows up in these types of national reports.

That’s quickly changing as Austin is becoming a “hot city.”

In fact, Austin was the #1 city to move to in 2020 and now in 2021 it is looking more and more like Austin will “win” this award for the second year in a row.

Homes are appreciating at an unpresented rate, to the tune of 25.8% from Jan, 2020 to Jan 2021. And it’s not slowing down anytime soon.

With climbing home prices, comes climbing requirements to buy a home in Austin, TX.

Things like your salary, your down payment, credit score, and your debt to income ratio come into play when thinking about buying a home.

In this article, we’re going to focus on the salary it takes to buy a house in the current market in Austin, Texas.

Most articles are not up to date with the current market values, so I’m going to do my own brief article on what it takes to buy a house in Austin.

First of all, take a look at the cool graphic as seen on hsh.com.

According to this graphic, it would take a salary of $79,000 to buy a house in Austin. Unfortunately, this is not the case.

Current Median home price in Austin, TX is closer to $510,000. 

No that was NOT a typo. 

To buy a home in Austin right now, you’ll need to earn much more than $79,000, unless you’re bringing a lot of cash to the table.

The salary you must earn to buy a home in Austin

The image above shows the estimated salary required to buy a median-priced home in each major city in the US. The good news is that you don’t need as large a salary if you buy below the median, so somebody in Austin, TX who makes $50,000 can still buy a single family detached home!

If you were looking to buy a median priced home in San Francisco, you need a salary of $161,948. That type of salary in Austin puts you in the top 1% of the homes for sale in Austin so it really begs a huge question …why don’t these big salary people move to Austin?

Oh wait, they are…

Shameless plug alert…(and if YOU are that person, please call or text me at 512-799-7950)

I think the most revealing piece of information from this graphic is the fact that Austin is just so much more affordable than other areas in the Country.

Median Home Price IN AUSTIN

The following graph from my friend at The Housing Report shows current median home prices in Austin, TX (current):

If you’re wondering what a mortgage payment at the current market in Austin would be, don’t look at this outdated 2012 Biz Journal article, which listed the average monthly mortgage payment in Texas as around $824.00.

To be fair, it’s probably slightly more in Austin, because of higher property taxes, cost of living, etc… But, also to be fair, Austin is the BEST city in Texas, so an extra $100 per month is worth it, right?

The reason that the monthly mortgage payment is (so low) for our median priced home is a combination of low prices and low mortgage interest rates.

You might be saying to yourself, LOW PRICES at $500K+

Take a look at the graph below:

Now granted, the $360,000 is now closer to $500K, which jumps Austin up 3 spots in line with Denver. 

Compared to the 3 California metro areas, Seattle, and Boston areas, Austin is still a “bargain.”

Many Austinites would love for things to stay the same, but change is good.

 

How Interest Rates Are Affecting The Salary Requirement To Buy A Home In Austin, TX

A recent client was able to purchase a million dollar home with a salary of just $115,000. 

A combination of bringing enough cash to the table and an interest rate of 2.75% helped this family qualify for a mortgage payment of $2,300/month not including property taxes and home insurance.

So, low interest rates are helping potential home owners purchase homes they might not think they could afford.

Every other market shares the benefit of low mortgage interest rates, but they have home prices that (in Austin terms) are through the roof.

You really have to expect that as the housing market recovery continues in Austin, we’ll continue to see home values rise.

Builders certainly cannot create new homes at these prices, so once the demand for homes exceeds what is already in place, expect to see our median price soar higher and higher.

With more and more Tech companies moving their headquarters to the Austin area and more and more Californians and New Yorkers moving to Austin with the work from home movement there is no end in sight to Austin’s growth.

In other words, if you CAN buy in Austin do it NOW.

If you are in the market to buy a home or sell a home, you’ll do much better if you understand the short-term and long-term ramifications of the decisions you make when it comes time to move. Take advantage of our market knowledge by working with me, and you’ll end up as happy as our customers whom we’ve served before you. 

Summary: What Salary Do I Need To Buy A Home In Austin

You can still find house in the Austin area for around $400,000. But if you want an updated home  expect to pay closer to $500,000 and up depending on what part of Austin you choose to live in.

Depending on your down payment, you’ll need at least a $100,000 salary to comfortably purchase a house. Remember, it’s not just the mortgage payment. You have property taxes (which are increasing), HOA dues, home insurance, and other bills to consider.

If you’re ready to start looking for your dream home in Austin, TX call or text me at 512-799-7950.