California transplants to Houston have bigger housing budgets than locals

People moving to Houston are coming armed with home-buying budgets 17.5% bigger than what locals have, according to a new Redfin analysis.

Why it matters: Houston was once known as an affordable city, and while it still is nationally, locals — particularly Black and brown residents — don’t hold the purchasing power.

• The gap puts Houston in the top 10 cities nationwide where out-of-towners have budgets outpacing those of existing residents.
• The trend is driving up home prices and depleting the housing inventory.

State of play: Most people are coming from states like California, where income taxes are high.

By the numbers: Transplants have an average maximum budget of $608,902, compared to locals shopping with $518,398, the analysis found.

• Houston’s average price for a single-family home broke the $400,000 mark for the first time in March.
• And in June, the median price of homes jumped 13.2% from June 2021 to $355,000 — the highest median of all time.

What they’re saying: “Even though the housing market has slowed, the share of homebuyers moving to different parts of the country has not,” said Redfin deputy chief economist Taylor Marr in the analysis.

• “That’s partly because home prices and mortgage rates have increased so much that homebuyers with the flexibility to relocate are seeking out affordable areas,” Marr added.

The bottom line: For those who want to buy a house in a large city, Houston maintains its status as an attractive market.

• But that doesn’t always work in favor of locals — especially those in neighborhoods that are gentrifying.