Rising home prices in North Texas are hammering home affordability.
And fewer local households can afford to buy a house because of the combination of rising mortgage rates and home costs.
A buyer must have more than $63,000 in annual household income to purchase a mid-priced home in the Dallas area, according to a study by HSH.com. That's based on making a 10 percent down payment and financing the purchase at about 4 percent over 30 years.
That's slightly more than the area's median household income of about $62,000, according to the latest data.
Home prices in North Texas have risen more than 40 percent in the last four years and are at a record high.
Year-over-year median home prices in the area are about 12 percent higher than they were just a year ago, according to HSH.com, an online mortgage firm.
While housing costs have jumped in D-FW, they are still well below many coastal big-city markets.
The cities with the highest housing costs include San Francisco, where it takes a median income of $160,589.84 to buy a mid-priced home, and San Diego, where a household income of $113,530.43 is needed to qualify.
D-FW homeowners are spending an average of just over 15 percent of their annual income on mortgage payments, according to a study by Zillow.
Even with recent price increases, that's still less than the historical local average of using about 20 percent of income to make mortgage payments.
D-FW residents are spending even more on rent — about 30 percent on average.
Nationwide, homeowners are spending almost 16 percent of their monthly income to buy a house, the highest percentage in 10 years.
With interest rates and home costs rising in most markets and salary increases still at modest levels, Zillow expects Americans will have to pay more of their income to keep a roof over their heads.
"As mortgage rates rise, buyers will face higher financing costs and already expensive homes will come with even higher monthly mortgage payments," Svenja Gudell, Zillow chief economist, said in the report.
"Nationally, mortgage rates still have room to grow before the share of income needed to pay the median monthly mortgage reaches the historical average, but many more expensive coastal markets are either close to or have exceeded what has been considered historically affordable."
Mortgage payments in Los Angeles, San Francisco and San Jose, Calif., eat up the biggest share of the median household income — more than 40 percent.
The most affordable homebuying markets are Pittsburgh and Indianapolis, where owners spend just 11.2 percent of their income on home payments.
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