AUSTIN – (By Dale King) – A new report from the Texas Association of Realtors finds that affordability and limited access to financing are significant obstacles for minorities and other Texans trying to purchase homes across the state.
The 20-page Texas Homebuyers and Sellers Report documents growing diversity in household composition and ethnicity among Texas homeowners, while also highlighting increasing affordability pressures that lead many prospective buyers to postpone home purchases.
“The profile of Texas homebuyers is as diverse as the state itself, continually broadening as the demand for Texas real estate grows,” said Vicki Fullerton, chairman of the Texas Association of Realtors. She added, “At the same time, rising home prices, lower household incomes and tight lending standards are making it increasingly difficult for some Texans to afford a home.”
The TAR report emphasizes the widening affordability gap. Median household income among Texas homebuyers fell nearly 3% year-over-year to $94,200, while the median price paid by Texas buyers was $215,000. That price point is considerably higher than the Real Estate Center at Texas A&M University’s estimate of $150,000 for typical entry-level and first-time homes.
For expanding homeownership in minority communities, lack of credit remains a primary barrier.
“In my opinion, in the African-American community, the most difficult challenges are lack of credit, lack of income and lack of savings,” said Shad Bogany, a Realtor with Better Homes and Gardens Real Estate Gary Greene and former chairman of both the Houston Association of Realtors and the Texas Association of Realtors. Bogany, who previously hosted a real estate call-in show on KCOH, noted that while down-payment assistance programs exist, their availability varies by community and Houston has relatively few.
Bogany emphasized that poor credit is often the biggest obstacle for African-American buyers. Combined costs—down payment, taxes and insurance—create a significant barrier for households already stretched by monthly bills and limited income. “It used to be that someone could come in to the office with $1,500 and I could do something for them,” Bogany said. “But those days have gone.”
Debt is increasingly preventing Texans from saving for or buying homes, the report finds. On average, debt delayed Texans from purchasing or saving for a home by three years. Forty-four percent of Texas homebuyers reported saving between six and 12 months for a down payment, compared to just 10% in the 2016 report.
Fullerton also pointed to rising property taxes as a factor that worsens affordability: “As obstacles to purchasing a home increase, soaring property taxes due to a lack of accountability when tax rates are set at the local level have made it difficult for Texans to continue to afford that home.” The Texas Association of Realtors supports legislative efforts intended to increase transparency and public engagement in the property tax rate-setting process.
The TAR report suggests shifts in life stage and timing for homeownership: the median age of first-time buyers in Texas rose to 35, up three years, while the median age of sellers fell to 46, down eight years.
Ethnic diversity among Texas homebuyers is also increasing. Across all buyers surveyed, 14% identified as Hispanic, 6% as African-American and 4% as Asian. Among first-time buyers, 27% were Hispanic, while repeat buyers included a higher share of African-American homeowners at 27%, a figure affirmed by both Bogany and Fullerton.
The share of single female buyers rose five percentage points to 19%, and single male buyers increased two points to 9%.
Additional findings from the report include:
- Among married couples who bought homes, 85% identified as White/Caucasian, 13% as Hispanic/Latino, 6% as African-American and 4% as Asian.
- A larger share of Texas homebuyers lived with family or friends before buying (36%) compared to the national average (11%).
- Conversely, fewer Texas homebuyers rented an apartment or house prior to owning their home (13%) compared with the national rate (41%).
Data for the 2017 Texas Homebuyers and Sellers Report was drawn from the 2016 Profile of Homebuyers and Sellers Texas Report by the National Association of Realtors, which analyzes responses from Texans who bought or sold a home between July 2015 and June 2016.
May 12, 2017 Realty News Report Copyright 2017