How Much House Can I Afford in Texas?

Texas is a big place, with a great deal of variation in home prices from one place to the next. As you can imagine, when you ask a question like, “How much house can I afford in Texas?” you’ll end up with quite a few different answers. 

It’s still a question worth asking, though. 

As you begin your home-buying journey, it’s important to know your budget and how it fits in with housing prices throughout the Lone Star State. How much house can you get for your money in your location of choice? What about if you look at the next town over, or even a little further afield? 

We did a bit of math to help you understand what you can afford and how you can make the Texas housing market work in your favor.

How much house can I afford in Texas? Location, location, location

When you look at how much house you can afford in Texas, where you buy matters almost as much as your budget. 

Statewide, the median home price in Texas is $301,763* and the average price-per-square foot is $181. Assuming you allocate 35% of your monthly income to housing expenses, you could afford a home at this price on a salary of $67,577**. 

However, this is just the state average. In reality, how much you pay for a home varies widely depending on your location. 

To illustrate this point, the graph above shows median housing prices for one of the most expensive places in Texas (Austin) compared to one of the least expensive (Beaumont). As you can see, the difference between the two locations is pretty extreme.

Why do housing prices vary so much? 

Home prices go up or down based on housing demand and availability in any given area. The quality of schools, access to amenities, and economic opportunities all play a part. All of this factors into how much house you’ll be able to afford, without financial strain, in your part of Texas. 

Also, keep in mind that when we talk about housing affordability, we’re basing our numbers off of what’s called a “front-end ratio”. The front-end ratio is calculated simply by taking your estimated housing payment and dividing it by your monthly gross income.

An example: $2,100 housing payment ÷ $6,000 monthly gross income = 35% front end ratio

Most loan programs have a target front-end ratio of 35%. This means you have the best chance of qualifying for a mortgage if your housing expenses make up 35% or less of your gross monthly income.  

Throughout this article, when we say a home is “affordable” for a specific income, we mean the monthly mortgage payment is at or below a 35% front-end ratio. 

But in reality, there is often some flexibility around this number. Some lenders may accept a higher front-end ratio, depending on the loan program or other compensating factors. It’s important to explore all of your options before you assume you can’t afford to buy a home, in Texas or anywhere else. 

*Median home prices and price per square foot as of 8/31/2023.

**Throughout this article, when we list monthly mortgage payments, we base our figures on a 30-year mortgage with a 20% down payment and an interest rate of 7.25%. We also include monthly property tax and homeowner’s insurance payments, based on average costs for the area. 

Where can I afford to buy a house in Texas with my salary? (And how much house will I get?)

Since there can be such a wide difference in home prices from one place to another, it’s more valuable to look at prices in specific parts of Texas. From there, you can get a better idea of how home prices match up with your budget.

Below, we show you the numbers based on four different income brackets. For each bracket, we also list at least one location in Texas where you should be able to afford a home on this income.

…if I make 70K a year?

If you make $70,000 a year, you can comfortably afford a home that costs up to $267,000. Here’s what that budget will get you in Tyler, Houston and San Antonio Texas.

Tyler

Tyler is a city southeast of Dallas, with a lot of employment opportunities in energy production and agriculture. Most of the area is laid out like a suburb, and the public school system is above average. 

How much house can you afford on$70K a year  in Tyler? This depends on the actual home you purchase, because the real cost per square foot varies depending on a number of factors.  

But for the sake of argument, let’s say you buy a home for $255,414 (the city’s median price) that works out to be exactly $119 per square foot (the median price per square foot in Tyler).

If you make $70K a year, you could potentially afford a 2,146 square foot home in Tyler, Texas. 

Houston

You might not expect Houston to be one of the most affordable places to buy a house in Texas, given that it’s such a large city. But Houston has relatively low housing prices. 

If you make $70K a year, you could potentially afford an 1,883 square foot home in Houston, Texas. 

San Antonio

Like Houston, San Antonio is surprisingly affordable for such a large city. It’s also a great place to settle down. The public school system is above average and there are employment opportunities in many industries.

If you make $70K a year, you could potentially afford a 1,691 square foot home in San Antonio, Texas.

…if I make 80K a year?

At $80K a year, you could afford a $323,000 house without spending more than 35% of your monthly income. This gives you many options for places to buy in Texas, including potentially even larger properties in all of the cities we listed above, as well as: 

Garland

Garland is a relatively small city within commuting distance of Dallas. It has a strong employment market and the schools are highly rated. 

If you make $80K a year, you could potentially afford a 1,677 square foot home in Garland, Texas. 

Ft. Worth

If you’re looking for a larger metro area, bustling Ft. Worth is a great option on an $80K income. You should be able to afford a home at the area’s median price of $307,816. 

If you make $80K a year, you could potentially afford an 1,854 square foot home in Ft. Worth, Texas. 

Dallas

Dallas is often rated as one of the best places to live in Texas. It has above-average schools, and one of the largest employment markets in the state. Based on the median price per square foot, you can afford a modest-sized home on an $80K annual income. 

If you make $80K a year, you could potentially afford a 1,789 square foot home in Dallas, Texas. 

…if I make 125K a year?

A salary of $125K a year gives you plenty of options for buying a home in Texas. If you spend no more than 35% of your monthly income on housing expenses, you can afford to buy a house that costs up to $510,000.

Round Rock

Round Rock is just north of Austin. Public schools in the area receive higher ratings than in Austin, and the area offers a more suburban feel.

If you make $125K a year, you could potentially afford a 1,907 square foot home (or more) in Round Rock, Texas. 

…if I make $140K a year?

A salary of $140K a year is enough to buy in all but the priciest parts of Texas. If you spend no more than 35% of your monthly income on housing expenses, you can afford to buy a house that costs up to $565,000. 

You could use this money to buy a larger home in one of the more affordable areas, like Dallas or Houston, or purchase a moderately sized home in more expensive Austin. 

Austin

Austin is one of the most popular cities in Texas. This might explain why it has the most expensive housing market of any major city in the state.

We mentioned Austin in our example at the beginning of this article, but it’s worth mentioning again, because despite its relatively pricey housing market, you could still potentially afford a modestly sized home on a salary of $140K. 

If you make $140K a year, you could potentially afford a 1,786 square foot home in Austin, Texas. 

Buying a home in Texas? Learn more

Is it your time to buy a home in Texas? Check out these other resources to educate yourself on the process, including other cities and neighborhoods to consider in your search.

• What Is the Average Down Payment on a House in Texas?
• How Much Are Closing Costs in Texas?
• The Best Places to Live in Texas for Families
• Down Payment Assistance in Austin
• Down Payment Assistance in Brazoria County
• Down Payment Assistance Throughout Texas

What if I don’t have a large down payment? Can I still afford to buy?

To calculate mortgage payments throughout this article, we used a 20% down payment. That being said, 20% down is a pretty hefty sum, especially if you’re a first-time homebuyer. 

Not everyone has 20% to put down on a house, and you shouldn’t feel bad if you’re in that boat. Typical conventional loans require a minimum down payment of 3%, and FHA loans require 3.5% minimum, far below the 20% mark. There are even loan programs that allow buyers to purchase with zero down.

Of course, there are benefits to making a larger down payment, even if you can’t hit the 20% mark.

Mortgage lenders offer reduced interest rates to buyers who make a 5%, 10%, or 20% down payment, with each step up getting a better rate. Making a larger down payment also reduces how much you’ll need to borrow on your mortgage loan.

As you can see from the example below, these benefits stack up. With a larger down payment, you can afford a higher-priced home on a lower income. Or, you can purchase the same house with a more comfortable monthly payment.

But the difference between a 3% and 10% down payment is quite a bit of money. That’s where down payment assistance (DPA) comes into play. Texas has a strong selection of DPA programs to help homebuyers purchase through the state. 

Using down payment assistance in Texas

The most challenging part of getting DPA is finding information about all of the available programs, as well as finding a lender who is approved to work with your chosen program. 

Stairs Financial handles these steps for you.

Stairs streamlines your access to down payment assistance, making it easy for you to connect with a trusted lender and compare the loan and assistance programs you may qualify for, all in one place.

Learn more about your down payment assistance options.