By Michelle Pitcher – Austin Business Journal
A new housing affordability outlook from Zillow paints a grim picture of the Austin market.
By the end of the year, experts predict the Austin metro’s housing market will be the least affordable outside of California, a function of rising housing costs outpacing income growth.
Zillow measured housing affordability by examining the percentage of monthly income spent on a mortgage. Anything above 30% is considered “housing burdened.” Given current mortgage rates, the typical new homebuyer in Austin will be spending 30.1% of their income on their mortgage by December, according to the report.
Rates may rise
The report’s findings assume that mortgage rates will remain largely the same for the rest of 2021, but some experts said rates may soon go up.
While home prices constitute the largest portion of most people’s living cost, high housing costs can be counterbalanced by a relatively low cost of living overall. Austin Board of Realtors President Susan Horton said Austin remains competitive when it comes to other costs Realtors and lenders look at, including utilities and transportation.