The Housing Affordability Index is the ratio of median family income to the income required to
qualify for an 80 percent, fixed-rate mortgage to purchase the median-priced home. This Index
indicates whether or not a typical family earns enough income to qualify for a mortgage loan on a
typical home. According to the readings for the five South Texas metro areas, homes became more
affordable between 2009 and 2012 as a result of income growth.
Since then, home affordability has fallen drastically as increasingly tight residential markets
across Texas have resulted in rapid home price appreciation. Laredo residents have experienced
the most dramatic drop in affordability as rising home prices have far outpaced income growth.
ECONOMIC TRENDS
Housing Affordability
12
Source: Real Estate Center, TAMU.
Annual Review of South Texas Economy