HOUSTON'S HOUSING MARKET has been enjoying a pretty incredible run, bolstered by favorable interest rates and a record-low supply. In August, a home that hit the market sold, on average, within 26 days, and the average sales price for a single-family home is up to $380K. The stories of housing markets across the country aren't all too different, as low inventory and sky-high prices are two common themes.
But a new metric illustrates why Houston continues to shine as one of the country's most affordable major metro areas. A typical homebuyer will put a 20 percent down payment on a new home, and the duration of time it takes to reach that amount is dubbed "years-to-save." Nationally, it will take nearly 7.9 years of saving 10 percent of the average income each month to build up the 20 percent down; this is up from just 7.1 years before the pandemic, and 6.1 years in the early 2000s.
In a report released by Tomo — a new home-buying site helmed by Skylar Olsen, formerly with Zillow — Houston currently comes in at 6.6 years-to-save. This figure represents an increase of about 18 months compared to the year 2001. Houston leads this stat among Texas metros: Dallas is 7.2, San Antonio is 6.9, and Austin is a whopping 10.1 (thanks, Californians).
Speaking of California, Los Angeles comes in at 19.2 — up by nearly 9 years since 2001! — San Diego at 16.8 and San Francisco at 17.9.
In a section satisfyingly labeled "Not the Avocado Toast," the Tomo report highlights "one of the most upsetting realities for millennials, brought into even starker relief during the pandemic": how difficult it will continue to be to meet major milestones such as buying a home. With the same savings rate as 20 years ago — 10 percent each month — but an aggressive spike in home values and a lack of accompanying growth in income, future generations are unlikely to achieve home ownership at the same rate.
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