Compare Housing Affordability Between Texas Metro Areas

Austin and Dallas require the highest incomes to buy a median-priced home among the seven Texas metro areas covered here, while El Paso and McAllen require the lowest. This section uses two indicators: the Texas A&M Real Estate Center’s Housing Affordability Index, with data from March 2018, and Redfin’s income-needed figures, with data from August 2023.

How do Texas metro areas compare on housing affordability?

The two indicators cover different metros. The Texas A&M index includes Texas as a whole plus Fort Worth, Houston, San Antonio, Austin, and Dallas. Redfin’s figures cover all seven metros: Austin, Dallas, Fort Worth, Houston, San Antonio, El Paso, and McAllen.

Texas A&M Housing Affordability Index (March 2018)

In 2018, Fort Worth and Houston had the highest values of the five metros. Dallas had the lowest, below the state figure.

Redfin income needed to buy a median-priced home (August 2023)

Austin and Dallas sit above Houston and San Antonio, which places them in the costlier group. Austin’s required income is 58,024 USD higher than McAllen’s, the lowest of the seven. Fort Worth falls in the middle of the range.

Median home prices by metro

In August 2023, Austin had the highest median sale price of the seven metros in the Redfin data reported by KXAN, at $462,748. McAllen had the lowest, at $249,999. The seven metros span a spread of USD 212,749, so the choice of metro changes the purchase baseline substantially.

Top tier: Austin and Dallas. The two highest-priced metros sit well above the rest. Austin’s median is USD 37,748 higher than Dallas’s, and Dallas is USD 65,000 above Fort Worth.

Middle tier: Fort Worth, Houston and San Antonio. These three fall between USD 319,990 and USD 360,000. Fort Worth is the most expensive of the group, and San Antonio is the least expensive, with a gap of USD 40,010 between them.

Lower tier: El Paso and McAllen. The two lowest medians are close to each other, USD 255,000 and USD 249,999, a difference of USD 5,001. Both are below every other metro in the table.

Limits of this snapshot. These figures describe one month, August 2023. Use them as a relative baseline, not as current prices. For current comparisons, rerun the same metro definitions against a recent release from the same source.

Income needed to buy a median home

Redfin’s August 2023 estimates put the household income needed to afford a median-priced home between $68,184 in McAllen and $126,208 in Austin across the seven Texas metros it covers. Austin requires about 1.85 times the income of McAllen, a gap of $58,024.

The figures form three clusters:

• Top tier: Austin and Dallas, both above $115,000. The two are $10,295 apart.
• Middle tier: Fort Worth, Houston and San Antonio, between $87,273 and $98,185. Fort Worth sits about $6,000 above Houston, and San Antonio is about $4,900 below Houston.
• Lower tier: El Paso and McAllen, both under $70,000. They differ by only $1,364.

The largest single break falls between Dallas and Fort Worth ($17,728) and between San Antonio and El Paso ($17,725). Those two jumps split the list into the three clusters above.

The source is KXAN, citing Redfin’s data. The report does not list the mortgage rate, down payment or loan term behind each figure, so the numbers cannot be rebuilt from first principles. Use them to rank metros against one another rather than as a precise budget for a specific purchase.

How is the affordability index calculated?

The Texas A&M ratio is a ratio of household income to home prices. The Texas Real Estate Research Center at Texas A&M publishes it as a Housing Affordability Index. Its reading is direct: at 1.5, a family earning the state median income could afford a home priced 50% above the median sale price. The higher the value, the more home a median-income household can afford relative to local median prices.

To read a metro’s value, use these steps:

• Find the index value for the metro and the reporting date. The fact sheet gives a single snapshot, March 2018.
• Read 1.5 as the state benchmark. Metros above it are more affordable than the state by this measure, and metros below it are less affordable. Austin, at about 1.5, is roughly level with the state.
• Check the gap between metros, not only the rank. Small differences near the same value may not be meaningful.

The 30% rule is Redfin’s definition of affordability: a household is affordable when it spends no more than 30% of its income on housing. The two measures answer different questions. The Texas A&M ratio compares median incomes with median prices, while the 30% definition tests whether a specific housing cost fits a specific budget. The KXAN report states the definition but not how the income-needed figures were calculated, so the 30% definition should not be treated as the formula behind those figures.

Austin vs Dallas: how large is the price and income gap?

Austin’s price premium shows up on both sides of the affordability equation. In August 2023, Redfin put the median-priced home in Austin at $462,748, compared with $425,000 in Dallas. The income needed to afford that home was $126,208 in Austin and $115,913 in Dallas. Both gaps are about 9%. The fact sheet does not establish the causes, so the three drivers below are hypotheses to test against local data.

Demand is the first driver. Austin’s price pressure is usually linked to job growth and in-migration, since more households competing for a similar housing stock pushes sale prices up. The fact sheet contains no job or migration figures for either metro, so check employment and population-movement series for each county before drawing conclusions.

Supply is the second. Land availability and zoning rules set how quickly new homes can be built. Where land is constrained or zoning limits density, the same demand produces higher prices. Compare the share of residential land zoned for multifamily versus single-family use in each city, and review recent permit counts rather than relying on price trends alone.

Income gap is the third driver, and the only one the sheet quantifies. A higher price translates directly into a higher required household income. The table shows the Austin premium in those terms:

The ranking is not stable across measures. The Texas A&M Housing Affordability Index for March 2018 put Austin at about 1.5 and Dallas at about 1.4, so Austin was slightly more affordable than Dallas on that measure (about 1.5 against about 1.4, a small difference). The premium therefore appears in the 2023 Redfin figures but not in the 2018 index.

Where are the most affordable Texas metros?

In the Redfin August 2023 dataset, El Paso and McAllen are the two lowest-cost metros among the seven Texas metros listed, which makes them the reference points for the bottom of the state’s range. The fact sheet gives no wage, employment, or population figures for either metro, so the points below describe what to verify rather than what the numbers show.

El Paso: wage and employment profile

• Compare local wages with the cost of housing. A low price level only makes a metro accessible if local pay supports it.
• Check the mix of employment sectors and whether pay is concentrated in lower- or higher-wage occupations.
• Test wages against the 30% spending threshold: divide annual housing costs by gross income and see whether the result stays under that limit.

McAllen: job market and services

• Review how many employers operate in the metro and whether jobs are spread across several sectors or concentrated in one.
• Check access to health care, schools, retail, and transportation from residential neighborhoods, because lower home prices can coincide with fewer nearby services.

Population and household profile

• Compare population trends and typical household size in El Paso and McAllen with those of the larger Texas metros. The fact sheet provides no figures for either.
• Household composition determines which home sizes are relevant. A metro where single-person households dominate has a different housing demand than one dominated by families.

The Texas A&M index in the fact sheet covers Fort Worth, Houston, San Antonio, Austin, and Dallas, not El Paso or McAllen, so it cannot be used to rank these two metros.

Which metro fits your budget?

Matching a household to a Texas metro comes down to one test: does the monthly housing cost you can carry cover a median-priced home in each shortlisted metro once a down payment and mortgage are included? Run the same checks on every metro in the shortlist so the comparison stays like-for-like.

Step 1: Match household income to a shortlist

• Convert gross annual income into a monthly housing budget at the 30% level Redfin uses as its affordability definition: annual gross income × 0.30 ÷ 12.
• Convert that monthly budget into the home price it can support, using the mortgage formula in Step 2. Then compare that price with the median sale price in each candidate metro, or compare your gross income with Redfin’s income-needed figure for that metro. In August 2023, Redfin reported medians of $462,748 in Austin, $425,000 in Dallas, $360,000 in Fort Worth, $338,000 in Houston and $319,990 in San Antonio.
• Drop any metro whose median is clearly beyond what your budget can support, then keep two or three for detailed checks.

For a second view, the Texas A&M Real Estate Center’s Housing Affordability Index (March 2018) placed Fort Worth just above 1.7, Houston at 1.7, San Antonio at 1.6, Austin at about 1.5 and Dallas at about 1.4.

Step 2: Estimate down payment and mortgage cost

The sheet does not give down payment or rate figures, so use your lender’s current quotes. Apply the same down payment percentage to every metro. Then the difference in monthly cost comes from price alone.

• Loan amount = median price − down payment.
• Monthly principal and interest = loan × r ÷ (1 − (1 + r)^(−n)), where r is the monthly interest rate and n is the number of monthly payments.
• Add the other housing costs your lender quotes, then compare the total with your Step 1 budget.

Step 3: Use commute and transit access as a tiebreaker

When two metros pass the budget test, the commute tiebreaker decides. Measure drive or transit time from the actual addresses you are considering, at the hours you travel. The sheet contains no transit data, so rely on a route-planning tool and record the results for each metro side by side.

Data sources and limits

The affordability figures in this article come from two sources, published about five years apart.

Why the 2018 and 2023 figures are not directly comparable

• Different units. The 2018 figure is a unitless index. The 2023 figure is a dollar income requirement. Neither source converts one into the other.
• Different time points. The 2018 data describe March 2018. The 2023 data describe August 2023. Each reflects the market of one month, not an average over the period between them.
• Different publishers. The Texas A&M center and Redfin are separate organizations. The fact sheet does not show that they use the same method or inputs.
• Different city sets. El Paso and McAllen appear only in the 2023 data. Texas as a statewide figure appears only in the 2018 data.
• Secondary reporting. The 2023 Redfin numbers reached this article through a KXAN news report. The original Redfin dataset was not reviewed.