Mortgage madness

Zillow predicts home affordability in San Antonio will continue to plummet this year

Zillow says home affordability in San Antonio will continue to plummet

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San Antonio homebuyers are in for some sticker shock before year’s end if one home-affordability forecast is accurate. 

An analysis released August 12 by real estate platform Zillow predicts home affordability in San Antonio will keep falling, with mortgages eating up more of homebuyers’ income. And it’s happening quickly.

According to Zillow, the typical homebuyer in the San Antonio area should expect to put 21.8 percent of their income toward mortgage payments in December, up from 19.5 percent in June.

While that is likely bad news for potential homebuyers in San Antonio, it could be worse. Up in nearby Austin, residents are fretting about the region becoming more California-ized than ever.

According to Zillow, home affordability in the Austin area will keep falling to the point that it’ll be the country’s least affordable metro for homebuyers outside California.

As of June, Austin enjoyed home affordability greater than only eight major U.S. metros. But by December, Zillow expects Austin to drop below Seattle, Miami, and New York City for home affordability. If that happens, the five metro areas with worse affordability than Austin would all be in California: San Francisco, San Jose, San Diego, Los Angeles, and Riverside-San Bernardino.

Zillow claims the typical homebuyer in the Austin area should have expected to put 19.7 percent of their income toward mortgage payments in June 2020. A year later, that figure had climbed to 25.3 percent. Even if mortgage rates stay the same, Austin homebuyers should brace themselves to be forking over 30.1 percent of their income for mortgage payments in December, Zillow says.

By comparison, the same mortgage-payment numbers are projected to climb from 39.3 percent to 43.1 percent between June and December in San Francisco, and from 36.8 percent to 40.9 percent between June and December in San Jose.

The mortgage-affordability outlook is far rosier for Texas’ other major metro areas, the Zillow analysis shows:

  • The typical homebuyer in Dallas-Fort Worth should anticipate spending 22.1 percent of their income on mortgage payments in December, up from 19.8 percent in June.
  • The typical homebuyer in Houston should anticipate spending 18.8 percent of their income on mortgage payments in December, up from 17.2 percent in June.

“Strong demand and rising prices for homes are overwhelming the ability of low mortgage rates to keep monthly payments down,” Nicole Bachaud, economic data analyst at Zillow, says in a news release. “As prices continue to outpace income gains, affordability constraints will start to slow home-price growth.”