Fewer people can buy a home in Austin, leading to drop in sales

The supposed “light at the end of the tunnel” is that home price growth will likely slow.

AUSTIN, Texas — Housing affordability within the Austin area has dwindled to where only a select few people can reasonably buy a home, a report found.

According to KVUE’s media partners at the Austin American-Statesman, new metrics from the National Association of Home Builders and Wells Fargo highlight the dwindling percentage of homes that are affordable for the residents in the city.

The “housing opportunity index” compiled by these two businesses showed about 30% of homes for sale in the area are affordable for a family earning about $110,000 annually.

This annual income benchmark is down from 47% in the first quarter of this year. Alternatively, in the second quarter of 2021, more than half (55%) of homes for sale were affordable for a family earning the median income.

The Statesman said rising interest rates are one of the reasons houses in area are becoming increasingly unattainable, because acquiring a mortgage has become even harder. Other factors include median home prices increasing and new developments that focus on high-income housing.

Austin home prices continued their upward trajectory throughout both July and August, making the entrance into the housing market even more difficult. Paired with a downturn in the stock market, would-be homebuyers are having a harder time getting the funds for a down payment or mortgage.

Even as residents struggle to buy a home in the area, sellers are still seeing success. Home prices have continued to climb, even with a drop in sales volume. Home sales dropped by 30% in August to 858 sales, but sold with a median of $555,000, which is an increase of 3.6%.

The supposed “light at the end of the tunnel” is that home price growth will likely slow, according to the Statesman.