How Much Home Can You Afford in DFW?

A Dallas–Fort Worth Real Estate Affordability Update

If you’re thinking about buying a home in Dallas–Fort Worth, one of the first (and smartest) questions to ask is:“How much home can I realistically afford in this market?”

With North Texas continuing to grow, property taxes varying by city, and interest rates influencing monthly payments, affordability in DFW is about more than just home price—it’s about strategy.

Let’s break it down.

1. In DFW, Monthly Payment Matters More Than Price

In the DFW metroplex, two homes with the same price can have very different monthly payments depending on location.

Your true housing cost includes:

• Mortgage principal & interest

• Property taxes (a big factor in Texas)

• Homeowner’s insurance

• HOA fees (common in newer DFW communities)

• PMI, if applicable

A $375,000 home in one DFW suburb may cost hundreds more per month than the same-priced home elsewhere due to tax rates alone.

2. Understanding DTI: What Lenders Look for in Texas

Most lenders follow the 28/36 debt-to-income guideline:

• Housing payment: ~28% of gross monthly income

• Total debt: ~36% (housing + car loans, credit cards, student loans)

Example:If your household earns $9,000/month:

• Target housing payment: ~$2,500/month

• Max total monthly debt: ~$3,240/month

That payment range might translate to very different price points depending on:

• City (Dallas vs. Frisco vs. Arlington)

• School district tax rates

• HOA costs

3. DFW Property Taxes Can Change Your Buying Power

Texas has no state income tax, but property taxes are higher—and in DFW they vary widely by city, county, and school district.

This means:

• Your lender approval may look strong

• But your monthly comfort depends on where you buy

A good local estimate is critical before choosing a price range.

4. Interest Rates + DFW Prices = Strategy Over Speed

In DFW today:

• Home prices are more balanced than in past peak years

• Buyers are negotiating more than before

• Seller concessions and rate buy-downs are common

Instead of stretching to the top of your budget, many buyers are:

• Buying slightly below max approval

• Using concessions to lower monthly payments

• Choosing flexibility over overextension

Affordability isn’t just what you buy—it’s how you structure the deal.

5. Down Payment Options Common in DFW

Buyers across DFW are using a range of down payment strategies:

• 3–5% down (first-time buyers)

• 10–15% down (move-up buyers)

• 20%+ down (investors and equity buyers)

The goal isn’t just to buy—it’s to own comfortably while handling taxes, insurance increases, and long-term costs.

6. Lifestyle Affordability Still Comes First

Even in a strong job market like DFW, smart buyers ask:

• Can I still save monthly?

• Can I handle rising insurance or tax assessments?

• Will this payment work if expenses increase?

Just because a lender approves a number doesn’t mean it fits your life.

Local Knowledge = Better Affordability

In DFW, affordability depends on:

• City-specific tax rates

• Neighborhood HOAs

• Insurance costs

• Deal structure and negotiation

Online calculators won’t show you the full picture—but a local strategy will.

Understanding how much home you can truly afford in Dallas–Fort Worth puts you in control and positions you to buy with confidence—no matter where the market goes next.