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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (23992)	2/20/2005 6:54:33 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Income for Texas families trailing rising home prices Despite recent industry forecasts that the Texas economy is growing, research economists with the Real Estate Center at Texas A&M University in College Station say statistics show paychecks aren't keeping pace. Since the end of 2003, the average income of Texas households has dropped by 2 percent, while the median sales price of a Texas home is up by more than 3 percent to $129,900. As a result of this, researchers at the Real Estate Center say less than half of Texas households -- about 49.5 percent -- can afford to buy an average-priced home, compared with 52.8 percent a year ago. "The combination of lower household incomes and higher home prices means that fewer Texas households can afford to buy a home compared with the year before," says Jack Harris, a research economist with the Real Estate Center in College Station. However, he adds that interest rates, which fell 12 basis points throughout the past year, managed to soften the blow somewhat. The Texas Housing Affordability Index, which tracks the relationship between housing costs and incomes in most metropolitan and a few non-metropolitan areas of the state, fell to .99. According to the center, this means that the average household income is 1 percent below that needed to buy a median-priced home. In the fourth quarter of 2003, the index was 1.04. For first-time home buyers, housing is even less affordable. The First-Time Homebuyer's Affordability Index is .91, meaning that the average income of a renting household in Texas is 9 percent short of the amount needed to buy the median-priced starter home with a loan covering 95 percent of its value. According to the real estate center, the FTHAI was .95 a year ago. However, despite the statewide trend, housing became more affordable in some metropolitan statistical areas. The most noticeable improvements were in Austin, which was up 1.22 in 2003 to 1.25 at the end of 2004. © 2005 American City Business Journals Inc. austin.bizjournals.com