Your daily dose of Austin
Smartphone image
×
Make your inbox more Austin.
Local news and fun, every day 6am.
Austin could become the most expensive city outside California by the end of 2021

360 Condominiums on 360 Nueces Street is home to more than 430 luxury homes. (Laura Figi/Austonia)

Boomtown Austin is now the seventh least affordable city in the U.S. and is expected to become the least affordable metro area outside of California by the end of the year, according to a new Zillow report.


Sandwiched between Riverside, California and Miami-Fort Lauderdale, Florida, Austin fell six spots on the affordability rankings. By the end of the year, the capital city is expected to pass historically expensive cities like Seattle and New York.

In a healthy budget, rent should eat up no more than 30% of one's monthly income and anything above is considered "housing burdened." According to Zillow, monthly rent consumed 28.6% of renter budgets in Austin in June 2021 and that portion is set to rise to 29.6% by December.

As for homeowners, mortgage payments took up 25.3% of homeowners' monthly income in June and are expected to rise to 30.1%, effectively becoming a burden, in December. By then, the only more expensive markets will be in sunny California.

If mortgage rates stay the same, the average Austin metro-area homeowners will pay $3,021 per month. If the rates rise by 3.5% or more, mortgage payments will increase to $3,125.

What's hurting:

An influx of California migrants, which Zillow calls the "Great Reshuffling," have historically come in with larger salaries in search of cheaper property. People who are used to paying higher prices for lodging may be able to stomach the housing increase but many Austin residents will not.

Fortunately, Zillow says "rapid deterioration in affordability is likely to contribute to a slowdown in appreciation going forward" because "as these conditions persist, affordability will suffer and home value appreciation and rent growth are likely to slow over the mid- to longer-term."

What may help:

In order to get housing costs back on track to an affordable level, Zillow said relaxing zoning restrictions may help as it creates easier paths to building more inventory. By increasing the supply of affordable housing units, including high-density units like condos and apartments, it could help bridge the gap for those who can't afford current prices.

As of June, 18 of the 50 largest metro areas are paying more than 30% for housing each month. By the end of December, that number is expected to jump up to 21, and Austin isn't far behind.

Popular

Gemini season: View your horoscope for the month here

(Pixabay)

This Gemini season, starting today, is appropriately paradoxical, twisting and blending simple concerns with life’s bigger, faster and more fiery quests.

Shortcuts: Aries, Taurus, Gemini, Cancer, Leo, Virgo, Libra, Scorpio, Sagittarius, Capricorn, Aquarius, Pisces

Keep ReadingShow less
Austin-area cyclist charged in murder of biking star Moriah Wilson

(Moriah Wilson/Instagram)

Austin police have charged Kaitlin Marie Armstrong, a local cyclist, for the murder of Moriah "Mo" Wilson.

Keep ReadingShow less