Only 35% of Houston-area households could afford a median-priced home during the third quarter of the year, according to the latest Housing Affordability report from the Houston Association of REALTORS®.

The median home price fell 1.1% to $345,600 during the third quarter, while the monthly mortgage payment rose from $2,450 a year ago to $2,620. Given the average interest rate of 7.04%, that means the typical buyer needed an annual income of $104,800 to afford a median-priced home — 16% higher than the same time last year.

That’s the lowest housing affordability has been in Houston since 2012, down from 39% in Q2 2023 and 41% in Q3 2022.

It’s also slightly lower than statewide affordability — thirty-six percent of Texans could afford a median-priced home during the third quarter.

However, Texans experienced a more affordable market than buyers in the rest of the country. Nationwide, affordability dropped to 33%, down from 38% year over year.