The American dream of homeownership is becoming increasingly elusive for many Texans, as a new analysis reveals that potential homebuyers need to make at least $99,000 to buy a house in Texas in 2025, according to the analysis from Realtor.com. This sobering statistic highlights a growing affordability crisis that places homeownership out of reach for a significant portion of the state’s workforce, even in a state traditionally known for its relatively affordable housing market.
The Stark Reality of Texas Housing Affordability
The $99,000 income requirement represents a dramatic shift in Texas’s housing market dynamics and underscores the financial challenges facing prospective homebuyers across the state. The minimum income required to buy a Texas home this year is roughly 30 percent higher than the state’s actual median income, creating a substantial gap between what most Texans earn and what they need to purchase a home.
This affordability gap isn’t just a number—it represents real barriers to homeownership for teachers, police officers, healthcare workers, and countless other middle-class professionals who form the backbone of Texas communities. The fact that a nearly six-figure income is now required for homeownership demonstrates how rapidly housing costs have outpaced wage growth across the state.
The Realtor.com analysis provides a methodical approach to understanding this crisis. To determine the minimum income a local resident would need to make to buy a home in their own state, Realtor.com calculated each state’s “affordability gap” by finding the difference in the actual annual income from the minimum recommended income to afford a median-priced home as of July 2025.
Comparative Context: Texas vs. National Trends
While the $99,000 requirement may seem daunting, the analysis reveals that Texans have it much easier than many other states, offering some perspective on the national housing affordability crisis. This relative advantage, however, provides little comfort to Texas families struggling to achieve homeownership at current income levels.
The broader national context shows similar challenges across the United States. According to the National Association of Realtors, U.S. households earning $75,000 a year can only afford 21.2% of home listings as of March 2025 – up slightly from 20.8% a year prior and representing the biggest gain of any income group. Even this modest improvement demonstrates that the nation’s housing affordability gap persists across all income levels.
The situation has dramatically deteriorated compared to pre-pandemic conditions. In 2019, buyers in the $75,000 income bracket could afford nearly half, 48.8 percent, of all active listings. By March 2025, that share rose modestly to only 21.2 percent, illustrating how dramatically the housing market has shifted against middle-income buyers over the past five years.
Understanding the Methodology Behind the Numbers
The $99,000 figure isn’t arbitrary but reflects careful analysis of current market conditions, mortgage rates, and housing costs. The methodology considers various factors including median home prices, current mortgage interest rates, property taxes, insurance costs, and the traditional debt-to-income ratios that lenders require for mortgage approval.
This comprehensive approach ensures that the income requirement reflects real-world homebuying conditions rather than theoretical calculations. The analysis accounts for the total cost of homeownership, including not just the mortgage payment but also property taxes, homeowners insurance, private mortgage insurance (where applicable), and other homeownership expenses that significantly impact monthly housing costs.
The calculation also assumes traditional lending standards, including typical down payment requirements and debt-to-income ratios that mainstream lenders use to evaluate mortgage applications. This makes the $99,000 figure a practical benchmark rather than an optimistic estimate that might not reflect actual lending practices.
Regional Variations Within Texas
While the $99,000 figure represents a statewide average, significant variations exist across different Texas markets. Major metropolitan areas like Austin, Dallas, Houston, and San Antonio each have distinct market characteristics that can push income requirements higher or lower than the state average.
Austin, for example, has experienced particularly dramatic price appreciation in recent years, driven by technology sector growth and population influx. The city now offers up to $40,000 in down payment and closing cost assistance through a forgivable loan, with eligibility requiring that home prices not exceed $579,025 and buyers complete a homebuyer education course. These assistance programs acknowledge that even high-income tech workers may struggle with Austin’s elevated housing costs.
Smaller Texas cities and rural areas may offer more affordable options, but these markets often have fewer employment opportunities and may lack the economic diversity that supports higher wages. This creates a challenging trade-off between housing affordability and career advancement opportunities for many Texas families.
The Income Gap Challenge
The 30 percent gap between required income and actual median income represents a structural challenge that affects housing market participation rates and economic mobility. When homeownership requires income levels significantly above what most residents earn, it limits the market to higher-income buyers and reduces overall housing demand among middle-income families.
This gap also creates cascading effects throughout local economies. When middle-class families cannot afford to buy homes, they remain in the rental market longer, potentially driving up rental costs and creating additional affordability pressures. Additionally, reduced homeownership rates can affect local consumer spending, as homeowners typically invest more in their communities and local businesses.
The Texas Comptroller of Public Accounts has recognized this challenge, with researchers releasing the Housing Affordability Challenge in August 2024, examining the factors leading to the rapid decline in affordability in Texas and across the U.S. and how the crisis is affecting Texans. This official recognition indicates that housing affordability has become a significant policy concern at the state level.
Historical Context and Market Evolution
The current affordability crisis represents a dramatic shift from Texas’s historical position as a relatively affordable housing market. For decades, Texas attracted residents and businesses partly due to lower housing costs compared to coastal states, creating a competitive advantage that supported economic growth and population expansion.
Housing costs in Texas are climbing faster than incomes, straining renters and homeowners alike. Rising costs and stagnant wages make it harder for many Texans to afford housing or move into homeownership, according to analysis by the Texas Demographic Center. This trend reverses decades of housing market dynamics that made Texas an attractive destination for families seeking affordable homeownership.
Despite efforts by Texas lawmakers to ease property tax bills, increases in expenses like insurance and utilities ate into that tax relief, demonstrating how multiple cost factors contribute to overall housing affordability challenges. This complexity means that addressing housing affordability requires comprehensive approaches rather than single-policy solutions.
Impact on Different Demographics
The $99,000 income requirement affects different demographic groups differently, creating particular challenges for young adults, single-income families, and workers in traditionally middle-class professions. First-time homebuyers, who typically have lower incomes and less accumulated wealth, face especially significant barriers under current market conditions.
Texas has several homebuyer programs designed to address these challenges, with eligibility requirements that generally require buyers to fall into the low- to moderate-income category and have a credit score of at least 620 to qualify. According to Experian, the average credit score in Texas was 695 as of 2024, so most potential buyers meet credit requirements even if income remains a barrier.
Various assistance programs attempt to bridge the affordability gap. For example, Austin’s program provides up to $40,000 in assistance for both down payment and closing costs through a forgivable loan, though income limits apply—for a single-person household, the income must not exceed $55,400, though this threshold increases with larger households.
Long-Term Economic Implications
The housing affordability crisis has broader implications for Texas’s economic competitiveness and demographic trends. When housing becomes unaffordable for middle-income workers, it can limit the state’s ability to attract and retain talent in key industries, potentially affecting long-term economic growth.
Reduced homeownership rates also affect wealth accumulation patterns, as homeownership has traditionally been a primary wealth-building vehicle for American families. When fewer families can achieve homeownership, it can exacerbate wealth inequality and reduce economic mobility across generations.
The crisis may also affect internal migration patterns within Texas, as families seek more affordable markets within the state or consider relocating to other states with better housing affordability ratios. This internal migration can affect local labor markets and economic development patterns across different regions.
Policy Responses and Potential Solutions
Recognition of the housing affordability crisis has prompted various policy responses at state and local levels. The Texas State Affordable Housing Corporation (TSAHC) provides down payment assistance to homebuyers and helps developers build affordable housing, representing one institutional response to the crisis.
Local governments have also developed targeted assistance programs. These range from down payment assistance programs to affordable housing development incentives, though the scale of these programs often falls short of addressing the broader market challenges.
Federal programs continue to play important roles, with FHA loans requiring only 3.5% down payment and VA and USDA loans offering 0% down payment options for eligible buyers. However, these programs don’t address the fundamental income requirements that create barriers for many potential buyers.
Future Market Outlook
The housing affordability situation in Texas faces several competing pressures that will influence future trends. Continued population growth and economic development support ongoing housing demand, while supply constraints limit the market’s ability to respond with increased inventory.
Interest rate trends will significantly affect affordability calculations, as lower mortgage rates can reduce the income required for homeownership while higher rates increase barriers. Current Federal Reserve policy and broader economic conditions will continue to influence these critical variables.
Construction costs, land availability, and regulatory factors also affect housing supply and pricing, creating additional variables that influence long-term affordability trends. The interaction of these factors will determine whether the $99,000 income requirement represents a temporary peak or a new baseline for Texas homeownership.
The finding that Texans need nearly $100,000 in annual income to buy a home in 2025 represents a watershed moment in the state’s housing market evolution. While Texas maintains relative advantages compared to other states, the income requirement still creates substantial barriers for many families and workers who contribute to the state’s economic success.
Addressing this challenge will require coordinated efforts from policymakers, developers, lenders, and communities to expand housing supply, support affordable development, and create pathways to homeownership for middle-income families. The stakes are high—failure to address housing affordability could limit Texas’s economic competitiveness and undermine the economic mobility that has long attracted residents to the Lone Star State.
As Texas continues to grow and evolve, finding solutions to the housing affordability crisis will be crucial for maintaining the economic opportunity and quality of life that define the state’s character. The $99,000 income requirement serves as both a sobering benchmark and a call to action for all stakeholders committed to preserving homeownership opportunities for Texas families.
