Housing affordability has become one of the defining economic issues in Texas. Between 2020 and 2023, home prices rose 30-50% across most Texas metros while mortgage rates more than doubled from 3% to above 7%. The combined effect has pushed the monthly cost of homeownership to historic highs relative to median incomes in cities like Austin and Dallas. El Paso tells a different story — and it's a story worth understanding if you're evaluating where to put down roots in Texas.
The Affordability Index Explained
The housing affordability index compares median household income to the income required to qualify for a median-priced home mortgage. A score of 100 means median income exactly covers the qualifying threshold. Above 100 means median-income households can afford median-priced homes; below 100 means they cannot. Most Texas metros have seen their affordability indices deteriorate sharply since 2020.
El Paso's affordability index has remained above 100 through the 2020-2026 housing cycle — one of the few Texas metros that can say that. The combination of moderate home price appreciation (4-6% annually vs. 15-20% in Austin) and El Paso's lower median home prices has kept the market accessible to a broader income range than peer cities.
Income Required to Buy in El Paso at Median Price
At El Paso's current median home price of approximately $265,000, with a 5% down payment ($13,250) and a 7.25% interest rate, the monthly principal and interest payment is approximately $1,726. Adding taxes ($490/mo estimated), insurance ($150/mo), and PMI ($100/mo), total housing cost is approximately $2,466 per month.
Using the standard 28% front-end debt-to-income guideline, qualifying for $2,466/month in housing costs requires a gross monthly income of approximately $8,807 — or an annual income of roughly $105,700. Using a 31% front-end ratio (FHA standard), the required income drops to approximately $96,000 to $98,000. At a 36% total DTI with no other debt, even lower income can qualify.
El Paso vs. Other Texas Cities: A Direct Comparison
- Austin median home price: ~$540,000. Annual income needed at 7.25%: approximately $190,000-$210,000. Far above Austin's median household income of ~$85,000.
- Dallas median home price: ~$400,000. Annual income needed: approximately $140,000-$150,000. Median HHI in Dallas is ~$65,000.
- Houston median home price: ~$330,000. Annual income needed: approximately $115,000-$125,000. Houston median HHI is ~$62,000.
- San Antonio median home price: ~$290,000. Annual income needed: approximately $100,000-$110,000. Median HHI in SA is ~$58,000.
- El Paso median home price: ~$265,000. Annual income needed: approximately $96,000-$105,000. El Paso median HHI is ~$55,000.
The Income Gap Problem — and Why El Paso Still Wins
You'll notice that in every Texas city — including El Paso — the income needed to buy at the median price exceeds the median household income. This gap is the affordability crisis in numerical form. But the gap in El Paso is smaller than in peer cities, and El Paso's lower cost of living across all categories means a lower nominal income actually provides more purchasing power here than the same income in Austin or Dallas.
Additionally, dual-income households close the gap significantly. Two El Paso teachers ($50,000 each), two EPFD firefighters, or one mid-career Fort Bliss NCO with a working spouse can comfortably qualify for El Paso's median-priced home in ways their counterparts in Austin or Dallas simply cannot.
Rent vs. Buy Calculator: El Paso 2026
Monthly rent for a comparable 3-bedroom home in northeast El Paso runs $1,400 to $1,700. Monthly ownership cost for a purchased home in the same area at $250,000 with 5% down: approximately $2,350 all-in. The premium for owning vs. renting is approximately $650 to $1,000 per month.
The case for buying despite that premium: every mortgage payment builds equity, and El Paso's historical appreciation of 3-5% annually means a $250,000 home gains $7,500 to $12,500 in value per year. Over a 5-year period, the equity build plus appreciation typically more than offsets the monthly cost premium over renting — but it requires staying long enough for compounding to work. Buyers who plan to stay 4+ years in El Paso generally come out ahead by buying.
Programs That Improve Affordability
The income math changes significantly when you layer in available programs. A first-time buyer using TDHCA's My First Texas Home program gets down payment assistance, reducing the cash barrier. A veteran using a VA loan eliminates the down payment entirely and avoids PMI, reducing monthly costs by $150-$200. An FHA buyer negotiating 3% seller concessions reduces upfront cash needs substantially. El Paso's affordability advantage grows further when these tools are applied.
ProGen Real Estate (TREC #619091) helps El Paso buyers model the true cost of homeownership versus renting in their specific circumstances. Broker Josue R. Jimenez and the ProGen team are committed to making the math transparent so clients make the decision that's right for them. Call (915) 691-1082 to run your numbers.