Houston-area home buyers need to earn even more per year if they want to purchase in Houston neighborhoods, according to a study conducted by real estate broker Paige Martin of Keller Williams Realty.
"On average, the salary requirements to buy a new home increased 7.7 percent from last year," Martin said Monday.
The salary study’s findings were posted on Martin’s website, HoustonProperties.com.
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Martin said the increase is prompted by factors like rising interest rates, appreciating property values, and more new construction homes.
"This increase has not slowed down the overall Houston housing market. We’re currently on pace for another record year," Martin said. "It does impact ‘how much house’ a buyer can comfortably afford."
Martin’s team examined median home sale prices sourced from the Houston Association of Realtors’ Multiple Listing Service database.
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Most neighborhoods’ median price values are only for single family homes. In some neighborhoods with an above-average percentage of condos and townhomes, such as the Medical Center, these types of properties were also used to determine median prices.
To determine what salary would be needed to "comfortably afford" a home in each neighborhood, HoustonProperties.com assumes that a homeowner would use 28 percent of his or her gross income to pay for the home (principal, interest, property taxes and insurance).
Those costs were based on a 30-year mortgage with a 20 percent down payment, 4.2 percent interest rate, 2.54 percent property tax rate and a 0.5 percent annual insurance cost, Martin said.
The report in the photos above lists the 10 highest salaries needed to get into Houston neighborhoods, plus the 10 lowest.
Most of Houston’s bigger suburbs land somewhere in the middle. For example, Katy, Cypress, Pearland, Friendswood and League City all come close to the $75,000 salary range, according to Martin’s report.
The neighborhoods selected for the study were ranked as top neighborhoods in previous HoustonProperties.com reports, such as "most accessible," "best real estate investments" and "top Houston school rankings."