Houston has long been celebrated for its affordability, attracting individuals and families seeking economic opportunities and a reasonable cost of living. Indeed, according to the Greater Houston Partnership, the Houston Metropolitan Area has the third-lowest living costs among the 20 most populous U.S. metropolitan areas.
However, data reveals a growing housing affordability crisis that challenges this perception. As of 2023, approximately 830,000 households in Houston’s three-county region—Harris, Fort Bend, and Montgomery—are in living situations where their housing is not considered affordable.
This troubling statistic raises critical questions: When one out of three households are burdened by housing costs, who can afford to live in Houston today?
Why is access to affordable housing essential?
Housing is universally recognized as a basic human need essential for health, stability, and well-being. Research shows that housing affordability impacts broader economic mobility, with cost-burdened households—those spending more than 30% of their income on housing— having less capacity to invest in education, healthcare, or savings. According to a report from the National Low Income Housing Coalition, over 8.1 million extremely low-income renter households in the U.S. are severely housing-cost burdened, spending more than 50% of their income on rent, which compromises their ability to cover other critical expenses. Furthermore, stable and affordable housing can significantly reduce stress and improve mental health outcomes, particularly for children and adolescents.
So how many people in our region can actually afford to live here, and what is driving this level of unaffordability?
Households are increasingly burdened by housing costs, especially renters.
The rate of households that are cost-burdened is a critical indicator of a location’s affordability, offering insights into how well housing costs align with residents’ incomes. A household is considered cost burdened if it spends more than 30% of its income on housing. A high percentage of cost-burdened households suggest that housing costs are disproportionately high relative to income, indicating a lack of affordable housing options.
The rate of housing-cost burdened households in our region is higher than it has been for at least the last decade, with renters disproportionately impacted.
In 2023, over half (52%) of renters in the three-county region—Fort Bend, Harris, and Montgomery counties—were housing cost burdened. For comparison, 24% of homeowners in the three-county region are housing cost burdened. The percentage of cost-burdened renters has increased by four points since 2010, compared to a decline of four points for homeowners. Among the three counties, Fort Bend currently has the highest rate of housing cost burdened renters in the region at 57%, up 14 percentage points from 2010.
Households that are severely cost burdened spend 50% or more of their income on housing. Households where rent accounts for half of total income are more likely than others to sacrifice necessities like utilities, fresh nutritious food, and health care to pay the rent and they are more likely to experience unstable housing situations and evictions. These are the most vulnerable among vulnerable households, and housing costs for this group have only become more burdensome.
Renters are also far more likely to experience severe housing cost burdens with 27% of Houston-area renters spending over 50% of their income on housing compared to just 11% of homeowners. As of 2023, over 30% of Fort Bend County renters spend at least half their income on housing—this is eight percentage points higher than two years prior in 2021. These statistics represent the 830,000 households in the Houston three-county region that are housing-cost burdened—400,000 of which are severely housing-cost burdened.
The affordability issue is even more pronounced for lower-income households which face much tighter budgets— meaning, if their limited income is consumed by housing costs, there are significantly fewer resources to cover other basic needs which increases the risk of debt, eviction, and financial instability.
In the three-county Houston region, 77% of very low-income households (i.e., less than or equal to 30% of HUD Area Median Family Income–HAMFI) are burdened by housing costs compared to 6% of median-income households. We see the same pattern among households that are severely cost burdened with two out of three extremely low-income households spending at least 50% of their income on housing compared to less than 1% of median-income households.
Rents are increasing while incomes are stagnating.
To understand one factor contributing to the rise of cost-burdened households in our region, we can examine the relationship between rising housing costs and stagnant income growth. When housing costs outpace inflation-adjusted income growth, residents face increased financial strain, often leading to higher rates of cost burdened households. By analyzing this relationship, we can gain critical insights into local affordability.
In Fort Bend and Montgomery counties, median household incomes between 2010 and 2023 were stagnant and increased by 3% in Harris County. However, incomes increased 11% across the state of Texas and 12% nationally. The Houston area’s sluggish income growth underscores a widening gap as rents continue to climb leaving many households struggling to keep up.
Median gross rents in Houston’s three-county region have risen significantly since 2010, outpacing income growth. Fort Bend County has the highest median rent at $1,839, a 21% increase since 2010. Median rent increased 28% in Montgomery County—the highest in the region—and 20% in Harris County during the same period. Conversely, median monthly costs for homeowners either decreased or remained flat in all regions.
Median monthly housing costs for a homeowner in Houston’s three-county region was lower in 2023 than it was in 2010. Median monthly housing costs for homeowners decreased between 2010 and 2023 by 10% in Fort Bend County, 12% in Harris County, and remained flat in Montgomery County.
Homeownership is becoming increasingly out of reach for many.
Homeownership, often viewed as a cornerstone of the American Dream, is becoming increasingly out of reach for many first-time homebuyers and owning a home can be particularly critical to wealth creation and upward mobility, especially for most low-income and non-white households since that wealth can be passed to future generations. According to the Federal Reserve, in 2022 the median net worth among homeowners across the U.S. was $396,200 and $10,400 for renters.
Historically, most households in all three counties owned their home with Fort Bend and Montgomery counties having the highest rates of homeownership at 77% and 69%, respectively, compared to Harris County at 55%. However, recent trends point towards a decrease in homeownership.
Between 2010 and 2019, homeownership rates declined across all three counties in the Houston region. In 2021, this trend reversed briefly, spurred by historically low interest rates and a rising wave of individuals relocating from urban, high-cost areas. However, by 2023, this momentum stalled in most areas with homeownership rates either decreasing or remaining flat compared to 2010 levels. Homeownership rates in Montgomery County declined five percentage points between 2021 and 2023 alone.
Overall, between 2010 and 2023, the number of households that rent increased faster than households that own, which contributed to the decline in overall homeownership rates over the last decade. Between 2010 and 2023, renter-occupied households increased by 71% in Fort Bend, 25% in Harris, and 93% in Montgomery counties while owner-occupied housing increased by 63% in Fort Bend County, 24% in Harris County, and 51% in Montgomery County.
The vanishing dream of affordability in Houston.
Houston has long been a symbol of opportunity, offering affordable living and pathways to homeownership. However, this reputation is being challenged.
Despite most Harris County residents viewing homeownership as both a critical milestone and a key to building wealth, our region is trending toward a majority-renter population, likely due to homeownership becoming increasingly unaffordable for many. The financial burden on renters has reached unprecedented levels, with over half spending more than 30% of their income on housing and over a quarter exceeding 50%. Stagnant wages coupled with escalating rents have created an unsustainable environment where many households are forced to sacrifice essential needs like health care, education, and savings just to keep a roof over their heads. For low-income renters, this often means a constant struggle to avoid eviction or homelessness.
Houston’s reputation for affordability is increasingly at odds with the realities of its housing market. As the gap between incomes and housing costs continues to widen, homeownership has become a pipe dream for many and renting, a seemingly reasonable alternative to homeownership, has become increasingly unsustainable for countless households.