Houston Housing Affordability on the Rise as Mortgage Rates Dip

Good news for Houston home shoppers: 39% of Houston-area households could afford a median-priced home in the second quarter of 2025, according to the Houston Association of Realtors' Housing and Rental Affordability Report. That's a bump from 37% during the same time last year.

Key Takeaways

More Houstonians Can Afford to Buy

Housing affordability improved in the Greater Houston area as mortgage rates declined slightly in the second quarter of 2025. It created more opportunities for prospective home buyers. Here's why:

• Median home price: $349,400 -- down 0.6% from last year.

• Mortgage rates: 6.79% average, compared to 7.00% in Q2 2024.

• Monthly payment (principal, taxes, insurance): $2,460, down from $2,510 last year.

• Minimum annual income needed: $98,400 -- a 2% decrease from last year.

HAR Chair Shae Cottar says the shift shows the market is becoming more balanced:

"Mortgage rates have been edging lower and recently hit their lowest point since April, which could draw more prospective buyers into the market. At the same time, many remain cautious, with inflation playing a key role in their decisions."

Houston & Texas Outperform the National Average

Affordability isn't just improving in Houston--it's also improving across Texas.

• Texas: 39% of households statewide could afford a median-priced home ($344,660), up from 36% last year.

• Nationwide: 34% could afford the median-priced home ($429,400), according to the National Association of Realtors.

• Price trends: NAR found that home prices rose in 75% of U.S. metro areas in Q2 2025.

Rental Affordability Sees Gains

For renters, the news is also encouraging. Forty-six percent of Houston renters could afford the average lease price for a single-family home in Q2 2025--up from 43% last year.

• Average lease price: $2,100 -- down 4.1% from last year.

• Minimum annual income needed: $84,000 (not including deposits or utilities).

• Why it matters: More renters may now be in a position to save for a future home purchase.

What This Means for Buyers and Renters

While affordability challenges remain--especially with inflation affecting everyday budgets--the combination of slightly lower mortgage rates, modest price adjustments, and easing rents is giving Houston-area residents more breathing room.

If you're thinking of buying:

• Get pre-approved early to lock in rates before they change.

• Compare multiple lenders--small differences in rates can save thousands over the life of the loan.

If you're renting:

• Now may be a good time to negotiate lease terms or explore different neighborhoods.

• Consider using rental savings to boost your home-buying budget.

Final Thoughts

Houston's housing market in 2025 is showing signs of improved affordability, both for buyers and renters. While it's not yet a buyer's paradise, the trend is moving in the right direction--making it worth a closer look for anyone hoping to make a move.

You can read the full Housing and Rental Affordability Report and other HAR housing reports at www.HAR.com/newsroom.