The Truth About Austin's Missing Housing

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Austin Board of REALTORS® releases Austin’s Missing Housing Analysis

Report examines housing affordability in Travis County and the City of Austin

AUSTIN, Texas – Today, the Austin Board of REALTORSⓇ released “The Truth About Austin’s Missing Housing,” a new research report confirming what industry experts have suspected: there is a severe undersupply of housing in Austin. The report sheds light on common barriers contributing to higher housing costs and offers actionable policy recommendations aimed to help bridge the gap between residents and missing housing in Travis County and the city of Austin.

The analysis found that in the first half of 2023, an estimated 60.3% of two-person households in Travis County earn 120% median family income or less and face an estimated 40.7% undersupply, or a shortage of 221,603 homes. Four-person households earning 80% MFI or less face an estimated 45.4% undersupply, or a shortage of 247,240 homes in Travis County.

In the city of Austin, an estimated 63.9% of two-person households earn 120% MFI or less and face an estimated 51.1% undersupply, a shortage of 215,007 homes in the first half of 2023. Four-person households earning 80% MFI or less face an estimated 50.0% undersupply, resulting in a shortage of 211,023 homes in the city of Austin.

“Our community must come together to address these decades-long challenges,” Emily Chenevert, chief executive officer of ABoR, said. “We commend Mayor Watson and Austin City Council’s bold leadership and commitment to tackling Austin’s housing affordability crisis head-on. Throughout this year, they've worked to advance important housing policies intended to reduce the cost of housing and increase our housing supply. This research reinforces the need for the policy changes already in motion, and we are confident this data will lay the foundation for future policy discussions.”

Methodology:

  • The report evaluated housing affordability for two household sizes (two- and four-person households), two types of buyers (repeat and first-time buyers) and assumed the average mortgage rate for the first half of 2023 (6.44%).
  • The five income cohorts reflect those adopted in the Austin Strategic Housing Blueprint:
    • 0-30%
    • 31-60%
    • 61-80%
    • 81-120%
    • 121+%
  • The home sale segments are based on homes in price ranges affordable to households in these five MFI cohorts.

Additional Report Findings:

  • An estimated 35.9% of existing homeowners in the Austin-Round Rock-Georgetown MSA earned the required income ($149,790) to qualify for a mortgage loan for the median-priced home, a decrease from 61.7% in 2013.
  • An estimated 17.6% of current renters earn the required income ($117,805) to qualify for a mortgage loan for the first-quartile sales price, a decrease from 39.5% in 2013.

“Affordability has historically been a constraint for homebuyers, particularly for first-time buyers,” Clare Losey, Ph.D., ABoR housing economist, said. “However, that constraint expanded and became a larger concern and more prevalent during the pandemic. The data underscores that there is an undersupply of homes for buyers earning no more than 120% of MFI, meaning homeownership would be difficult to attain for those individuals. The Central Texas region needs more inventory as home prices remain elevated relative to incomes across the region. Homeownership has historically been a cornerstone of wealth-building in the United States, and that needs to be accessible to everyone, regardless of socioeconomic status.”

Chenevert stated that making meaningful changes would help increase the missing middle housing types in our community.

“By revisiting outdated housing blueprints, streamlining development processes and championing regulatory reforms that prioritize market affordability, we can work toward ensuring that anyone who calls Austin home or would like to, has the ability to do so. We cannot afford the price of inaction.”

To download the full analysis of Austin’s Missing Housing, visit ABoR.com/TheTruth.

The Austin Board of REALTORS® (ABoR) is a nonprofit organization that has been serving the needs of Central Texas REALTORS® and homebuyers, sellers, and renters for nearly a century. Through professional development, grassroots advocacy, and community, we give our 20,000+ members the power they need to ensure people have homes. Through Unlock MLS, we connect both agents and consumers with the most accurate and reliable real estate marketplace in the region. For more information, contact the ABoR public relations team at abor@ecprtexas.com. For the latest local housing market listings, visit AustinHomeSearch.com.

ABoR Research is the economic research and publication arm of the Austin Board of REALTORS®, the largest professional trade association in Central Texas. Led by ABoR’s Housing Economist, Clare Losey, Ph.D., ABoR Research delivers timely market intelligence that helps Central Texas real estate professionals, consumers and policymakers understand trends and economic factors impacting the region's housing market.