Housing Affordability

Data Series Description

The Texas Housing Affordability Index (THAI) measures the ability of a household earning the median family income to qualify to purchase the median-priced home. The index is the ratio of median family income to the required income to qualify for a purchase mortgage loan at the current interest rate. A ratio of 1.00 means the median family income is exactly equal to the required income to purchase the median-priced home in the area. Affordability increases as the required qualifying income decreases relative to the median family income.

The index is calculated separately for all homebuyers (THAI) and first-time homebuyers (FTHAI). Both indexes are computed on a quarterly and annual basis. For a more detailed description of the methodology, click here.

The standard calculation for the THAI uses a down payment of 20 percent and a qualifying ratio of 25 percent. The standard calculation for the FTHAI uses a down payment of 10 percent and a qualifying ratio of 25 percent. However, the down payment and qualifying ratio vary among borrowers depending on the financial status of the borrower and the lender’s assumed level of risk.

Users may select from several down payment and qualifying ratio options to compute alternative HAIs. Users may select down payment-qualifying ratio options of 3.5 percent, 5 percent, 10 percent or 20 percent with either a 25, 30 or 35 qualifying ratio to estimate the HAI.

A lower down payment will increase the required qualifying income and reduce affordability. A higher qualifying ratio will decrease the required qualifying income and increase affordability.

Geographic Definitions

The THAI is calculated for the state, each MSA and metropolitan division, and selected counties.

Metropolitan areas are constructed from constituent counties as delineated by the U.S. Office of Management and Budget (OMB) in 2023. Delineation information can be found in OMB Bulletin No. 23-01. Historical data is calculated as if the 2023 delineations had always existed so the data is comparable over time.

Metropolitan Division: A county or combination of counties within an MSA that contains a core population of at least 2.5 million people.

Data Release Dates

Quarterly THAI data will be released approximately one month after the end of the respective quarter. Annual THAI data will be released in February.