If one home-affordability projection is correct, San Antonio homeowners will be in for some sticker shock by the end of the year. According to a report released on August 12 by real estate platform Zillow, home affordability in San Antonio would continue to decline, with mortgages consuming a larger portion of homebuyers’ income. And it’s all occurring at a fast pace.
According to Zillow, the average San Antonio homebuyer should budget 21.8 percent of their income for mortgage payments in December, up from 19.5 percent in June. While this is undoubtedly terrible news for San Antonio homebuyers, it might be worse. Residents in nearby Austin are concerned that the region is becoming more California-ized than ever. Austin’s housing affordability will continue to decline, making it the country’s least affordable metro for home buyers outside of California.
Only eight major U.S. metros had housing affordability higher than Austin as of June. However, Zillow predicts that by December, Austin would have fallen behind Seattle, Miami, and New York City in terms of housing affordability. If that happens, San Francisco, San Jose, San Diego, Los Angeles, and Riverside-San Bernardino will be the five metro areas in California with the worst affordability.
According to Zillow, the average homebuyer in the Austin region should have budgeted 19.7% of their salary for mortgage payments in June 2020. After a year, the percentage had risen to 25.3 percent. As per Zillow, Austin homeowners should expect to spend 30.1 percent of their income on house payments in December, even if mortgage rates hold steady.
In San Francisco, the same mortgage-payment numbers are expected to rise from 39.3 percent to 43.1 percent between June and December, while in San Jose, the same numbers are expected to rise from 36.8 percent to 40.9 percent between June and December.
According to the Zillow report, the picture for mortgage affordability in Texas’ other major metro areas is significantly brighter:
- In Dallas-Fort Worth, the average homebuyer should budget 22.1 percent of their income for mortgage payments in December, up from 19.8 percent in June.
- In December, the average homebuyer in Houston should expect to spend 18.8% of their income on mortgage payments, up from 17.2% in June.
“Strong demand and rising prices for homes are overwhelming the ability of low mortgage rates to keep monthly payments down,” Nicole Bachaud, economic data analyst at Zillow. “As prices continue to outpace income gains, affordability constraints will start to slow home-price growth.”