Building a future
San Antonio nails No. 1 ranking as most affordable metro for new homes
Residents of San Antonio and the entire country continue to struggle with the rising cost of housing. Increasingly, the American dream of buying a new home is slipping out of reach.
But for people in the San Antonio metro area, there’s a ray of hope. In a data analysis released October 28 by homebuying and home-selling platform Knock, Alamo City ranks first among major metro areas for the affordability of brand-new homes. The analysis shows 51 percent of San Antonio-area residents can afford a newly built home.
In the San Antonio area, Knock found the median price of an existing home stood at $297,000 in August. That was $9,200 below the median price of a newly constructed home. With an average 6 percent down payment totaling $18,372, the buyer of a brand-new home in San Antonio would need a median household income of $64,707, slightly above the actual median household income of $62,355.
To determine new construction affordability in the major metro areas across the country, Knock examined the 50 largest metro areas and analyzed the average percentage of new-construction transactions. Any metros below the average of 8 percent were eliminated from the analysis. That left 22 major metro areas.
To qualify for a mortgage on a $390,900 home, the median price of a new home sold in the U.S. in August, a buyer making a 6 percent down payment (the national average) would need an annual household income of just under $80,000, Knock says. This means just 40 percent of Americans would be eligible, based on the 2020 national median household income of $67,521.
“This analysis highlights how years of building undersupply and the current supply shortages are disproportionately impacting lower income homebuyers looking for alternatives in a housing market where homes are garnering multiple offers and selling for over asking price,” Sean Black, co-founder and CEO of Knock, says in a news release. “Although more new homes are expected to come onto the market in 2022, wages have not kept up with home price growth, keeping new construction out of reach for many, especially first-time buyers who don’t have the benefit of equity from a home sale.”
Dallas-Fort Worth tied for fifth place with Atlanta for the most major-metro households (48 percent) able to afford a newly built home, according to the Knock analysis. Houston landed at No. 6 (46 percent).
Not surprisingly, the Austin metro area tied for seventh place among the metros with the most households (60 percent) being priced out of the market for brand-new homes. To make matters worse, Austin ranked third for the largest gap ($126,192) between the median price of a newly built home ($499,450) and the median price of an existing home ($373,258).
Miami appears atop the list of metro areas for the share of households (80 percent) priced out of the market for newly built homes.