Income Needed for Family of 4 to Live Comfortably in Dallas (Arlington: section 8, apartment complexes)
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The median house and lifestyle (amenities, etc) in the northern burbs have improved substantially in recent years.
Quite the opposite has happened in McKinney. All the surrounding cities have become more attractive, and it's become a "doughnut hole" with absolutely nothing of value to offer.
Assuming a mortgage rate of 6.795%, with 12.2% down (the average down payment percentage in Texas last year), you’re looking at a monthly mortgage payment of $5,682 on this median-priced Frisco house:
One could argue that many buying in this price range have significant home equity, and that moreover, homebuyers at this price point are statistically unlikely to be first time home buyers. These buyers are also more likely to be higher income than average. Because of these factors, one could reasonably assume that among this cohort, their down payment would comprise a proportionally larger percentage of total home price than that of an average homebuyer. These assumptions are particularly true in today’s supremely unaffordable housing market, where demand has all but been decimated.
But even with 35% down, and the same purchase terms as described above, the mortgage payment on this hypothetical $707,000 house is still $4,363:
Abiding by the 28% rule, in order to afford the former monthly mortgage price of roughly $5,600, you’d need a monthly pre-tax income of $20,000. This works out to $240,000 per year. According to this non-governmental, unvetted source, in DFW, a $240,000 household income is in the top ninth percentile as of 2023: https://dqydj.com/income-by-city/
Under the second scenario, you’d still need to pull in $15,500 per month, or $186,000 per year as a household, in order to be within the 28% rule for the $4,300 mortgage payment. A $186,000 household income
represents the top sixteenth percentile of households in DFW, according to the same source: https://dqydj.com/income-by-city/
A few thoughts:
1. If the data from DQYDJ is to be believed, then median household incomes in DFW have risen substantially over the past couple of years. This source doesn’t share their data gathering protocol publicly so it’s difficult to ascertain the accuracy of their reported income data. The much more reliable Census pegs median household income in Fort Worth and Dallas at roughly $72,000 and $75,000 respectively, between 2018 and 2022:
2. When contemplating the ruinous and costly price of inflation, the government and it’s propagandist mouthpiece (the mainstream media), want you to focus on year-over-year rates of inflation rather than the cumulative brunt of purchasing power erosion since inflation went parabolic in 2020.
Between December 2019 and December 2023, cumulatively, inflation has officially robbed 19% of buying power, or 4.25% every year. I use the term “officially” because many doubt this number’s accuracy, and also doubt the government’s methodology in its collection and reporting of inflation data.
Nonetheless, to lose nearly 20% of buying power in four years is both devastating and astonishing, as it represents a rate of compounding annual inflation that’s more than two times above target: https://data.bls.gov/cgi-bin/cpicalc...2&year2=202312
3. If these home prices are the new normal, then why has mortgage demand remained broadly suppressed nationally since 2022? Despite steady declines over the past year, current mortgage rates in the mid-to-high 6% range, have not kickstarted demand. In fact, mortgage demand is weaker now than it was the same time last year: https://www.foxbusiness.com/economy/...ns-stalled.amp
4. The Fed is between a rock and a hard place. The Fed knows that if they cut rates now, prices and demand are going to soar, which they don’t want. The Fed funds rate has been held at a constant 5.25% to 5.5% since July, a supposedly “restrictive” level, and yet, the job market remains resilient, and consumer spending and retail sales are up in 2024.
5. Nationally, home prices still remain broadly more expensive than they were relative to incomes in 2006, the peak of the last housing bubble. In fact, housing unaffordability hasn’t been this unfavorable since the early 1980’s: https://www.cnn.com/2023/08/24/homes...984/index.html
6. The smart money has all but abandoned the housing market until some semblance of pricing sanity returns. I won’t purport to know how or when this all comes to an unceremonious end, but my thesis hasn’t changed: this housing market is not sustainable.
Quite the opposite has happened in McKinney. All the surrounding cities have become more attractive, and it's become a "doughnut hole" with absolutely nothing of value to offer.
If I was going for one of the "bargain" northern suburbs I'd skip McKinney and go straight for The Colony. At least there you're close to what Frisco and west Plano have to offer and it's still pretty cheap to live there (relative to Frisco and west Plano). If you don't care about schools or aesthetics it's worth looking at.
McKinney? Eh. The only thing I go there for is the downtown area and it has to be pretty special to drag me all the way out there. McKinney is a yawnfest.
If I was going for one of the "bargain" northern suburbs I'd skip McKinney and go straight for The Colony. At least there you're close to what Frisco and west Plano have to offer and it's still pretty cheap to live there (relative to Frisco and west Plano). If you don't care about schools or aesthetics it's worth looking at.
McKinney? Eh. The only thing I go there for is the downtown area and it has to be pretty special to drag me all the way out there. McKinney is a yawnfest.
Have you looked at The Tribute? That doesn't seem to fit your description of The Colony.
Frisco may have quite a bit, but the town is mostly geared towards children. It isn't really a good option at all if you don't have kids. I wish McKinney were just "boring." It's become blighted and filled with poverty and congestion, and the city leaders and its voters are encouraging the trend. If you want boring and far out, look at Prosper and Celina. Yet both are much more desirable than most anywhere in McKinney, although again geared specifically towards children (and big Indian families).
Last edited by Leonard123; 02-02-2024 at 08:48 AM..
I'd like to point out that the title of the thread is "income needed to live in DALLAS" and yet in the 2024 resurrection of this thread, all the comments have related to northern exurbs. Not a single mention of actual DALLAS.
1. If the data from DQYDJ is to be believed, then median household incomes in DFW have risen substantially over the past couple of years. This source doesn’t share their data gathering protocol publicly so it’s difficult to ascertain the accuracy of their reported income data. The much more reliable Census pegs median household income in Fort Worth and Dallas at roughly $72,000 and $75,000 respectively, between 2018 and 2022:
This is the median household income in DFW, but it contains the incomes of groups like new graduates, singles (because it's just counting households, not people), retirees, etc. That's a fact.
The median income in DFW of married couples between the age of 30-65 with at least one school-aged child (ie: this is a smaller subset of the entire median) is $120k, which is right in line with the US median for the same group. Of course, this is the median across the entire metro, so it includes places in the south like Arlington with lower median incomes. The northern median is probably even higher. This is the group that lives in the suburbs and buys homes.
There are a few metros in the US (like SF area, northern VA) with household between 30-65 with at least one school-aged kid as high as $250k, so that's an upper limit; the lowest is like $85k, so one can assume the median household with school age children in Frisco is closing in on $200k if not slightly higher.
Unfortunately the groups that track this only track it at the metro level, so you'd have to ask for data for each city for these demographics. I don't have it.
Anyways, the point is if you are making assumptions on house prices based on the US median income, you are at best recommending that more home choices need to exist, like small duplexes and rental apartments. You are saying nothing about the ability of the median household to purchase a home in the suburbs at current prices for the groups they are trying to attract.
This is the median household income in DFW, but it contains the incomes of groups like new graduates, singles (because it's just counting households, not people), retirees, etc. That's a fact.
The median income in DFW of married couples between the age of 30-65 with at least one school-aged child (ie: this is a smaller subset of the entire median) is $120k, ....
OK, so using the old rule of thumb of 1/3 of your gross in house payments, that's $40k/year, or $3333 PITI. Probably works out to a loan amount on the order of $350k ish. If you put 20% down, that's a purchase price on a house of $430k.
I made a quick Zillow hunt for $330k-430k in Dallas, limited to single family. I get hits in Northwest Dallas, due north of Love Field, Casa Linda, Casa View, Lochwood, North Oak Cliff. In other words, gentrifying neighborhoods.
About 10 hits in Richardson. 30 or more in Garland. 10-15 each in Farmers Branch, Carrollton, Irving. 20 in Desoto. 10 or 15 in Cedar Hill.
You don't have to live way out in the boonies to live in the Dallas area.
Have you looked at The Tribute? That doesn't seem to fit your description of The Colony.
Frisco may have quite a bit, but the town is mostly geared towards children. It isn't really a good option at all if you don't have kids. I wish McKinney were just "boring." It's become blighted and filled with poverty and congestion, and the city leaders and its voters are encouraging the trend. If you want boring and far out, look at Prosper and Celina. Yet both are much more desirable than most anywhere in McKinney, although again geared specifically towards children (and big Indian families).
I said that the Colony is relatively inexpensive and I stand by that. There are a lot of houses there for under $400k. You might not want to live on those streets (I wouldn't either) but they're there.
Where is McKinney blighted with poverty and congestion? I don't get over to that part of town very often but I haven't seen the part of it you're describing. I don't doubt that it exists, I'd just like to know where it is.
I personally wouldn't want to live north of 121 and would only do it if my budget forced me to, which I doubt it will. Prosper and Celina are both pretty expensive, especially considering that you can't reach either of them on a proper highway yet. That alone is a deal breaker for me but I also don't have much desire to live around nothing but people with kids, Indian or otherwise. I don't hate children but I don't have any and I don't really want to be around a lot of them.
The median income in DFW of married couples between the age of 30-65 with at least one school-aged child (ie: this is a smaller subset of the entire median) is $120k, which is right in line with the US median for the same group. Of course, this is the median across the entire metro, so it includes places in the south like Arlington with lower median incomes. The northern median is probably even higher. This is the group that lives in the suburbs and buys homes.
Please provide evidence to support your claim.
The Census does not delineate income into cohorts, as the one you describe. I find your claim that married couples, between 30 and 65, with at least one child have a $120,000 median income in DFW dubious at best.
If the median household income for Dallas (encompassing single people, unrelated people living in a household, people over 15, people over 65, and married couples with children, among many other variables) was just $75,000 in 2022, how is it possible for married couples with at least one child to have a median income which is +60% higher than the aggregated median income in Dallas?
And now I’m inclined to believe the DQYDJ income percentiles I cited earlier are wrong. If the median household income between Dallas and Fort Worth averaged $73,500 between 2018 and 2022, how is a $184,000 household income only within the top sixteenth percentile? $184,000 represents an income which is +150% higher than median, and yet it’s supposedly just the sixteenth percentile. It doesn’t add up.
The Census does not delineate income into cohorts, as the one you describe. I find your claim that married couples, between 30 and 65, with at least one child have a $120,000 median income in DFW dubious at best.
They actually do get quite fine grained if you want to dig through the data. You can even find income, among many other things, by census tract. Bear in mind that smaller groups do have larger margins of error. https://data.census.gov/all
Of most interest to me is the difference between single-income and dual-income households. I've often wondered what our housing market would look like if there were all or mostly single-earner households, and it probably not resemble what we see now. I doubt that percentage will decrease at least in the areas you are interested in.
Quote:
Originally Posted by ilovepizza1975
I said that the Colony is relatively inexpensive and I stand by that. There are a lot of houses there for under $400k. You might not want to live on those streets (I wouldn't either) but they're there.
Where is McKinney blighted with poverty and congestion? I don't get over to that part of town very often but I haven't seen the part of it you're describing. I don't doubt that it exists, I'd just like to know where it is.
I personally wouldn't want to live north of 121 and would only do it if my budget forced me to, which I doubt it will. Prosper and Celina are both pretty expensive, especially considering that you can't reach either of them on a proper highway yet. That alone is a deal breaker for me but I also don't have much desire to live around nothing but people with kids, Indian or otherwise. I don't hate children but I don't have any and I don't really want to be around a lot of them.
Have you ever looked at The Tribute off Lebanon Road? An 1800 square foot shotgun house is going to be well in excess of $600K. It's likely too far out for you as it's on a peninsula, but it is more expensive than anything comparable in Frisco or up north. It doesn't really fit in with The Colony.
As for McKinney, I would describe downtown and basically most anything near 75 that way along with Craig Ranch. The rest of the city is trending there with the planned developments approved and underway and the louses running the city and schools. It's already the cheapest city in the area, and they somehow see it as a target to make more affordable? I don't get it.
It sounds like you would probably be most comfortable in Dallas itself. As noted above, the cost and income needed to live there is a more appropriate discussion, but it would necessarily come down to neighborhood.
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