The report says Austin, Texas, will become the least affordable major U.S. city by December for homebuyers if you take all California locations out of the equation.
“By December, even if mortgage rates stay the same moving forward, homebuyers in Austin should prepare to spend 30.1% of their income on a mortgage — above the 30% housing-burdened threshold,” the report says. “The only markets that will be less-affordable than Austin at the end of the year are all in typically pricey California: Riverside, San Diego, Los Angeles, San Jose and San Francisco.”
Currently, Austin is still less expensive for homebuyers than three other major markets. Still, Zillow’s report predicts that the Texas capital is expected to overtake Seattle, Miami, and NYC in the coming months.
Zillow’s data further suggests that Austin is becoming more expensive due to home-seekers fleeing more expensive California markets for Austin, where home prices are generally lower. According to Zillow’s 2021 mover report from April, Austin was a top destination for residents who moved out of San Francisco between March 2020 and Jan. 2021.
This migration from the Bay Area area sometimes called the “Bay Area exodus,” also sent buyers to Phoenix, Arizona, and Charlotte, North Carolina. Together with Austin, these three markets saw the highest net inbound moves in the first 11 months of 2020.
With increases expected to hit Austin home-seekers in the coming months, Zillow recommends the local government relieve the expensive burden from current residents by relaxing zoning restrictions and make it easier to build more high-density housing like townhomes and condos.
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