Texas Homebuyers Face $99,000 Salary Barrier Amid Housing Crisis

Texas Homebuyers Face $99,000 Salary Barrier Amid Housing Crisis

In 2025, aspiring homebuyers in Texas face a daunting hurdle: prospective homeowners must earn at least $99,000 to purchase a median-priced home in the state, according to Realtor.com. With the median household income resting at $75,780, this creates a significant affordability gap of over $23,000. This gap means that the minimum income needed to secure a home is approximately 30% higher than what many residents currently earn, leaving a considerable number of potential buyers feeling priced out of the market.

This situation isn’t unique to Texas. Nationwide, affordability has dipped to levels not seen since 1985, as noted by the Texas Comptroller of Public Accounts. Rising home prices, along with escalating mortgage rates, have combined to severely limit options for many American families. The Covid-19 pandemic also played a role, as increased remote work opportunities attracted many to relocate to Texas and other metro areas, driving demand and, consequently, prices upwards.

Texas and Beyond

In fact, the Dallas-Fort Worth metropolitan area witnessed the highest population gains from 2020 to 2023, contributing to the area’s housing shortage. Currently, Texas is facing a shortfall of 306,000 homes, a situation aggravated by fluctuating economic conditions and construction lags that date back to the 2007-08 financial crisis. Now more than ever, many households find themselves cost-burdened, with a staggering 34% of Texan households struggling to meet their housing costs.

Among the most striking statistics, a whopping 88% of individuals earning under $20,000 are classified as cost-burdened. In contrast, only 8% of households with incomes of $75,000 or more experience similar struggles. The disparity is evident: Texas has just 25 affordable and available rental homes per 100 extremely low-income households, ranking below the national average of 34. Furthermore, rental units priced below $1,000 have decreased significantly, while units above $2,000 have surged by 253% since 2012.

Insights from the Housing Market

The situation is not uniformly bleak. Recent reports indicate that home affordability saw slight improvements in June as mortgage rates dipped and monthly housing costs decreased slightly. The Investopedia Home Affordability Index noted a minor enhancement, with the necessary household income to afford a median-priced home reducing to approximately $7,991 per month. However, the affordability gap still exists, showing that many still need an additional $980 to meet the ideal housing cost ratio of 30% of their income.

To get a clearer picture, let’s compare Texas with the most affordable states in the country. Iowa tops the list for 2025, where a minimum income of just $76,422 is enough to buy a home. The most affordable states list continues with Illinois at $85,196 and Kansas at $74,030. In stark contrast, Montana has emerged as the least affordable state, with potential buyers needing over $171,000 to comfortably afford a home worth $649,900. The situation in Montana juxtaposes sharply with the more favorable metrics in states allowing for lower income thresholds.

As Texas continues to rank first in new housing unit permits since 2008, the pressing question remains: how will the state tackle this affordability challenge amid a rising population and housing demand? As Texas Comptroller Glenn Hegar emphasized, effective solutions are crucial now more than ever. With rising costs, and a lack of affordable options, families are left feeling the pressure in a tightening housing market.