Despite the inventory issue hitting the Houston housing market hard in the first quarter across all home categories, the region remains more affordable than the U.S. average.
The Council for Community and Economic Research (C2ER) released its Cost of Living Index for Q1, surveying 260 urban areas total. C2ER delineates housing costs specifically, comprised of 73.8 percent homeownership and 26.2 percent apartment rent.
For housing costs alone, Houston is the seventh least expensive region among the 20 most populous metros, which includes the three big hitters: Manhattan, San Francisco and San Diego.
At a 99.8 index, Houston’s index falls 0.2 percent lower than the U.S. average of all 260 areas. Houston’s housing costs are also 46.7 percent below the average within the top 20 cities. The average price for a new 2,400 square foot Houston home is $275,356, which includes four bedrooms, two bathrooms, a family room, two-car garage all on a 8,000 square foot lot.
The price of the Houston lifestyle
Looking at the larger picture in Houston, the after-tax cost of living is 22.1 percent, making it the fifth most affordable big city.
On a larger scale, the after-tax cost of living is 2.5 percent below the average for all 260 urban areas surveyed in the study, making it an affordable option across the U.S. housing market, especially compared to west and east coast markets with similar populations.
Market trends
The Houston housing market experienced a few rough patches in the first quarter with declining year-over-year single-family home sales and average prices, according to the Houston Association of Realtors (HAR) — but those figures are compared to Houston’s record performance in 2015, and HAR says the market is more sustainable now.
HAR also found inventory supply grew from 2.9 months to 3.6 months in April, closer, but still months away, to the recommended 6-to-6.5-month range.
The rental market in Houston grew just 1 percent between April and May. For a one-bedroom, Houston’s median rent is $1,220, and two-bedrooms hit a median of $1,520 in June.
