If you’re starting to think about homeownership in North Texas, one of the first questions on your mind is probably: How much do I need to earn to actually afford a home here? Whether you’re looking in Flower Mound, Lewisville, or anywhere in the Dallas-Fort Worth area, it’s a smart question—and one with a few variables to consider.
Let’s walk through what determines home affordability in 2025 and how to calculate whether now’s the right time for your next move.
Why Income Matters More Than Just the Price Tag
When it comes to buying a home, it’s not just the listing price that matters—it’s how that price translates into a monthly payment that fits your income and lifestyle.
Lenders typically look at something called your debt-to-income ratio (DTI), which compares your monthly debt payments to your gross monthly income. Most conventional lenders prefer to see a DTI of 36% or less, with no more than 28% of your income going toward housing costs.
In other words, your income plays a huge role in determining how much home you can afford—and how comfortably you can manage your other expenses alongside it.
What’s the Average Home Price in North Texas in 2025?
According to the Texas Real Estate Research Center and local MLS data, the median home price in the Dallas-Fort Worth area hovers around $395,000 as of early 2025. Prices can vary widely depending on the city:
- Flower Mound: $525,000+
- Lewisville: $400,000+
- Argyle & Lantana: $550,000–$650,000
- Denton: $375,000+
If you’re eyeing a starter home or something more move-in ready, location and home size will significantly influence your budget.
Breaking It Down: What Income Do You Need?
Let’s say you’re targeting a home priced at $400,000 with a 10% down payment and a mortgage rate of 6.75%. Here’s what your monthly costs might look like:
- Principal & Interest: ~$2,332
- Property Taxes: ~$650 (DFW average is ~2.2%)
- Homeowners Insurance: ~$100
- Total Estimated Monthly Payment: ~$3,082
To keep this within the recommended 28% of your gross monthly income, you’d need to earn about $11,000 per month, or roughly $132,000 per year.
Here’s a quick reference table for different price points:
| Home Price | Down Payment | Monthly Payment (est.) | Suggested Income |
| $350,000 | 10% | ~$2,700 | ~$115,000/year |
| $400,000 | 10% | ~$3,080 | ~$132,000/year |
| $500,000 | 10% | ~$3,800 | ~$163,000/year |
| $600,000 | 10% | ~$4,550 | ~$195,000/year |
Note: These estimates assume average taxes and insurance in North Texas and may vary based on credit, loan terms, and location.
Other Costs to Keep in Mind
While monthly mortgage payments are a big piece of the puzzle, they’re not the only cost to factor in. Here are a few other key considerations:
- HOA Fees: Common in master-planned communities like Lantana or Castle Hills.
- Utilities: Bigger homes often mean higher bills—especially in the Texas heat.
- Maintenance: Owning a home means budgeting for upkeep, repairs, and seasonal needs.
- Closing Costs: Typically 2–5% of the home’s purchase price.
Planning ahead for these expenses can help ensure you feel confident—not stretched—when making your move.
What If You’re Not Quite There Yet?
If your current income isn’t quite at the level needed to afford your dream home in North Texas, you’re not alone. Rising interest rates and home prices have made affordability a bigger challenge in recent years.
That said, there are still options worth exploring:
- Look into first-time homebuyer assistance programs in Texas that offer down payment help or reduced interest rates.
- Consider surrounding areas where prices may be lower but commute times are manageable.
- Explore different loan types that offer flexible DTI ratios or lower down payments.
Even if you’re not ready today, building a game plan with a clear understanding of what’s needed is a great first step.
So, How Much Income Do You Really Need?
It depends—on your budget, your goals, and the type of home and neighborhood you’re aiming for. But with most homes in North Texas ranging from $350,000–$600,000, annual incomes of $115,000 to $195,000+ tend to support today’s market conditions.
The more clarity you have around your finances and what you’re looking for, the easier it becomes to make smart, informed decisions about homeownership.
Thinking about buying a home in North Texas? Connect with Your Home Free – Team Nelson for expert guidance and local insights tailored to your needs. We’re here to help you plan, prepare, and move forward with confidence—whenever you’re ready.