Paying for a starter home in Dallas requires a salary nearly $8,500 higher than the one needed to buy a home at the national average, market data from Redfin reveals.
In 2023, first-time homebuyers required an average annual salary of $72,885 to pay for a starter home in Dallas, a more than 10% increase compared to the salary needed the year prior, according to a new market analysis by online real estate brokerage platform Redfin.
Meanwhile, the average salary needed to pay for a typical single-family home in the United States was $64,403, a roughly 13% increase from a year before.
The phenomenon is driven by rising mortgage rates and increased demand from buyers, Redfin’s report explained.
With so few homes for sale and rising competition among buyers, many starter homes have become too expensive for the average worker to afford, according to Sheharyar Bokhari, a Redfin senior economist.
“Buyers searching for starter homes in today’s market are on a wild goose chase because in many parts of the country, there’s no such thing as a starter home anymore,” said Bokhari in the report.
“The most affordable homes for sale are no longer affordable to people with lower budgets due to the combination of rising prices and rising rates. That’s locking many Americans out of the housing market altogether, preventing them from building equity and ultimately building lasting wealth,” she explained.
The median sale price for a single-family home in DFW is about $275,000, while a typical 30-year mortgage averages around $1,800 a month, according to Redfin housing data.
“People who are already homeowners are sitting pretty, comparatively, because most of them have benefited from home values soaring over the last few years,” she said.
If current housing trends continue as they are, many would-be-homebuyers will inevitably be priced out of the market, according to Bokhari.
“Many house hunters searching for an affordable place to call home for themselves and/or their family are out of options, especially in more expensive parts of the country. As prices for the most affordable homes continue to climb and rates remain elevated, it’s becoming more true that you have to be wealthy to buy a home — especially if it’s your first one,” Bokhari said
“That’s why we’ve seen the share of affordable homes going to cash buyers, either individuals or investors, tick up: Because they’re the only ones who can afford them,” she added.
Redfin’s full report can be found here.