A recent Zillow affordability report ranks Austin as the seventh least affordable city in the U.S. The city is on pace to become the least-affordable city outside of California by December.
"Just being from Austin and knowing Austin you think, well I know where rich people live. I know where poor people live," Executive director at Housing Works Austin, Mandy DeMayo, said. "An interesting takeaway was that there is poverty and homelessness in every single city council district."
The researcher’s analysis compares the balance between cities’ wage rates and cost of living, revealing wages that have remained at a low rate while mortgage rents continue to rise at record figures.
"Affordability is defined as a person having to pay no more than 30% of their salary toward housing expenses, including rent or a mortgage, insurance and utilities," a KVUE report reads.
The Zillow analysis found that in Austin, 28.6% of a renter's income was used on paying rent. It is expected to rise to 29.6% by December. The real estate site notes that rent costs of 30% to be considered "housing-cost burdened" that causes uncertainty about whether the renter will be able to cover the remainder of his/her bills, and rent affordability exceeding 32% increases the probability of homelessness.
Similar to rentals, mortgage payments garnered an average of 25.3% of homeowner’s incomes in June, predicted to rise to 30.1% or an average of $3,021 per month in December.
The accelerated increase in prices is attributed to a large influx of wealthy individuals who move to Texas, typically from California, and cause housing and rental prices to rise, KVUE reports.
“But even if mortgage rates stay at current low levels, continued demand for homes will soon outweigh this advantage,” Zillow spokesperson Mark Stayton said. “Pushing mortgage payments as a share of income to the highest rate seen since at least 2014, when our data series begins. The more mortgage rates rise, the less affordable home loans will become in the coming months.”