To calculate how much you can afford to buy a house, in general, you need to consider the following – your household income, your monthly debts (e.g. car loan, student loan, etc); the the savings you have for a down payment, which still depends on the minimum requirement for the loan you’ve secured; and more cash for the closing cost aside from your downpayment.
Purchasing a home can be a good investment and while viewing homes is exciting, it’s unbalanced to leave out the other side of the story when buying a home. Searching for homes is easy, but finding the perfect one AND obtaining a loan for that home is the hardest part. But still, everything depends on where your target location is and how much you can afford.
Buying a home in Houston? You’re in for some really good news. You can check our Houston Real Estate Highlights for June and July to take a glimpse of the Houston housing market.
Houston is the fourth largest city in the U.S and the most populous city in Texas. The city has grown by 10.7% between April 2010 and July 2019 and is expected to see another population surge between 2020 and 2029. Houston’s booming job market, good weather, and low cost-of-living compared to many other major metropolitans are just some of the many reasons why buying a home in Houston is a great choice.
House prices are less expensive than Austin and Dallas and it’s possible to buy a house on a modest income thanks to the city’s wide selection of reasonably-priced housing, which is probably one of its biggest draws. In August 2021, Houston home prices were up 11.8% compared to last year, selling for a median price of $285K, where Houston homes sell after 17 days on the market compared to 31 days last year.
If you’re looking at Houston real estate, you might be wondering how much you need to make each year in order to afford a mortgage and interest payments each month. To take a median-priced home in Houston, you can use a home affordability calculator which estimates how much you can afford by considering your annual income, where you live, your monthly debts or spending, and how much you have saved for a down payment.
According HSH.com and National Association of Realtors’ 2021, here’s a current look at how much salary you would need to earn in order to afford a median-priced home in Houston.
How much salary do you need to earn in order to afford a median-priced home in Houston, TX?
30-Year Fixed Mortgage Rate : 3.17%
% Change from 1Q21: +0.13%
Median Home Price: $307,200
% Change from 1Q21: +9.01%
Monthly Payment: $1,536.22
Salary Needed: $65,837.96
While most people can afford a home that costs up to three times their annual household income, mostgage lenders also take into consideration your debt to income, the amount of debt you have versus the amount of income you bring in. This allows the lender to determine the maximum payment that you can afford each month after all your bills and debts are paid.
While this looks very simple with the numbers on hand, it’s important to consult with a real estate professional, financial adviser, or a mortgage lender to give you an actual estimate of how much you can afford, and the Houston homes available for you.
About ApexPro Real Estate
ApexPro Real Estate Group is a full-service real estate brokerage specializing in single family and attached residential properties throughout Houston and the surrounding areas. We are a privately-held small business that brings together top agents, cutting-edge technology, and unparalleled service to help clients throughout Houston to buy and sell real estate — and enjoy themselves every step along the way. Our client reviews exhibit our dedication to help our clients extends beyond the closing table and we would love to earn your business.