Although Houston’s median home price rose slightly in the fourth quarter of 2024, the average mortgage rate decreased, easing affordability constraints for buyers.

According to the Houston Association of REALTORS’® Q4 2024 Housing Affordability Index, 40% of Houston households could afford a median-priced home at the end of 2024. That’s up from 38% during the same time period in 2023. Affordability also improved year over year in the third quarter of 2024.

Given a median home price of $340,200 and an average mortgage rate of 6.63%, Houston households needed $2,360 per month to afford mortgage payments, taxes and insurance. In order for those costs to take up no more than 30% of a household income, the average Houston household needed an annual salary of $94,400.

A year prior, the average household needed $2,460 per month, or a salary of about $99,400 per year. That’s a 4.1% difference.

“The continued improvement in affordability is welcome news for Houstonians looking to achieve the dream of owning a home,” HAR Chair Shae Cottar said in a press release. “Moderating home prices and easing mortgage rates are creating more opportunities for buyers, but many still face challenges. There are thousands of down payment assistance programs available to help turn that dream into a reality.”

Rental affordability, however, decreased in Houston. The average monthly lease price of a single-family rental (SFR) rose 5% to $2,100 across the Houston metro in the fourth quarter of 2024. That means a household would need to make $84,000 in order to afford the average SFR, up from $80,000 during the same time in 2023. About 45% of Houston households could afford that, down from 47% a year prior.