Houston is often touted for its affordability. Compared to the only three larger cities in the US—New York, Los Angeles, and Chicago—the Bayou City is still a place where homeownership for a middle-class family feels within reach. Houston’s home prices are lower on average than even in smaller big cities, such as Phoenix and our archrival, Dallas.

But then, of course, there’s that pesky inflation and the rising cost of living nationwide. There are neighborhoods developing by the minute, pricing out low-income residents. Add to that issues more specific to Houston, such as the financial toll of natural disasters, in recovery after the fact or in home and flood insurance before it. And the out-of-control auto insurance market and the constant repairs our poor hoopties demand from driving on our pothole-and-nail-ridden roads.

We digress, but seriously, is Houston losing its edge? We wanted to know if it was still possible to find an affordable home inside the 610 Loop. The short answer is yes, but as always in real estate, this comes with caveats.

Thankfully, the housing market has cooled down some since peak pandemic, when wildly overbidding and houses going off the market within hours were the norm. Interest rates on mortgage loans are now higher, hovering around 7 percent, a result of the Federal Reserve attempting to sprinkle some water on this lively fire.

Local real estate agent Harris Benson, a broker associate with Douglas Elliman, says a significant portion of his clients are first-time homebuyers—perhaps such as yourself, reading this hoping for good news and some tips. The first thing he advises them to do is to evaluate their finances. Roughly, people can afford a house priced at four times their gross income—provided, of course, that they’ve saved up for a down payment (at least 3 percent) plus closing costs, and have some savings to spare after the purchase. “No one wants to be house poor,” Benson says. Other factors come into play in individual situations, such as debt-to-income ratio and credit score. Make sure to talk all this through with a mortgage lender and get yourself preapproved for a loan.

Once that’s done, you’re ready to start looking, a checkbook in one hand and a box of tissues in the other. In order to get a good picture of what the average Houston homebuyer can find in the loop these days, we asked Benson to do a simulation with us. For the purposes of this guide, we are a couple with a combined annual salary of $90,000 (roughly the average household income in the city) and a budget of maximum $350,000. We really want three bedrooms—we both work from home and want children soon—and prefer a single-family home with a yard but could be persuaded by a townhouse. Oh, and this home must be turnkey. Call us the Wantitalls.

Like pretty much any big decision, buying a house will come with a set of wish list criteria, and the Wantitalls won’t be able to check all of them off. “If you’re going to give something as a compromise, ideally, you should be getting something in return,” Benson says.

The most impactful box to uncheck? The yard, Benson answers without hesitation. Indeed, according to Redfin, the median price for a single-family home in Houston in March 2024 was $355,000, while the median price for a townhouse was $332,000.

The Wantitalls began their search in Montrose—why not dream a little for a second? They actually found a two-bed, two-bath condo for only $315,000, but there was a big catch: a $950 monthly HOA fee. Ouch. They moved on to Midtown, where they found two-bed, two-bath townhouses for $339,000 and $370,000; the former looked like a sardine can from the outside (“corrugated metal,” Benson corrects) and the latter had a small private patio but is too much out of the Wantitalls’ price range. Up in Rice Military, the couple found that third bedroom they’d really prefer to have, in a $360,000 townhouse.

While these townhouses were turnkey, they were all pretty outdated. Old slate flooring, a 1970s-esque kitchen…. Benson says that buyers prefer to have modern finishes, but you have to pay a premium for that. Ultimately, people in this price range find themselves compromising on those more cosmetic criteria. “What buyers really care about is they want it to feel clean when they’re walking inside,” Benson says.

So is that $350,000 single-family home in the loop really just a pipe dream? There was this small, charming two-story home in Rice Military going for $345,000. Sure, it only had two bedrooms and the parking situation on that street is terrible. “It’s small, but it’s cute,” Benson says, and the Wantitalls agreed.

If you want single-family living with a yard inside the loop, your best bets are in neighborhoods with older homes like the Northside. The Wantitalls found some Craftsman bungalows with three bedrooms in the $330,000 to $350,000 range. In the East End, away from the more expensive townhouse-centric “EaDo,” the couple found mostly two-bedroom houses between $325,000 and $340,000, with some hits on three bedrooms within their budget. They had better luck with three bedrooms in Third Ward, with a couple of homes on very small lots going for $315,000 and $319,000, but for larger homes and yards, they were looking more in the $365,000 ballpark.

Say the Wantitalls really didn’t want to compromise on their dream of having a three-bedroom house with a massive backyard, since they plan on having two children and three large dogs. And they just can’t get over the outdated interiors—after all, they have to live in this house every day. Then the Wantitalls should just get over it and look ever so slightly outside the loop, somewhere like Westbury, perhaps. They should just remember to get good flood insurance.