AUSTIN, Texas — A new study has revealed the extent to which a median-income homebuyer in Austin would have to invest if they wanted to afford monthly mortgage costs.
According to a recent study conducted by real estate marketer Zillow, to afford a monthly mortgage payment on the typical home in Austin, a median-income household would need to put $209,333 down – a 44.9% down payment.
That's well above the typical average for the U.S., where the study found that a homebuyer making the median income would need to put down nearly $127,750, or a 35.4% down payment. That $127,750 down payment is what a household making the median income would need to invest when purchasing a typical home in the U.S., valued at about $360,000, so that the monthly mortgage payments take up no more than 30% of a household’s monthly income.
Those numbers highlight why the rise in mortgage rates has cooled housing market activity, with many buyers being unable to afford to buy without outside help. About 43% of home buyers in 2023 reported using a gift from family or friends to help with a down payment. The study also referenced the housing surge fueled by pandemic-era rates having since been undercut by the broad rise in mortgage rates.
Others report receiving help via down payment assistance. Across the Austin metro area, the average amount of down payment assistance available for qualified buyers is just over $15,000.
Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.