Thinking about making the Lone Star State your new home? You’re not alone. Texas continues to attract thousands of new residents each year, drawn by promises of lower taxes, booming job markets, and that famous Southern hospitality. But what’s the real cost of living in Texas compared to other states?
Whether you’re considering a move from California’s pricey markets or evaluating Texas against other affordable states, understanding the true financial picture is crucial. From Austin’s tech boom to Houston’s energy sector and Dallas’s corporate headquarters, each Texas city offers different cost structures that could make or break your budget.
Let’s dive into the numbers, compare real expenses, and help you determine if Texas living fits your financial goals.
Overview of the Cost of Living in Texas
Texas ranks as one of the more affordable states in America, with an overall cost of living index sitting approximately 8-12% below the national average. This means your dollar stretches further here than in most other states, particularly when compared to coastal markets like New York or California.
The state’s affordability stems from several key factors. Texas has no state income tax, which immediately puts more money back in your pocket. The state’s vast land availability keeps housing costs relatively reasonable, though this varies significantly by city. Additionally, Texas’s business-friendly environment attracts companies, creating job opportunities that often come with competitive salaries.
However, “affordable” is relative. While Texas beats the national average overall, cities like Austin and parts of Dallas have seen dramatic cost increases in recent years. The key is understanding which expenses will hit your budget hardest and planning accordingly.
Housing Costs in Texas
Housing costs in Texas represent your biggest monthly expense, typically accounting for 25-35% of your income. The good news? Texas housing remains more affordable than most coastal states, though prices have risen substantially since 2020.
Home Prices Across Texas
| City | Median Home Price | Monthly Mortgage (Est.) |
|---|---|---|
| Houston | $285,000 | $1,650 |
| San Antonio | $265,000 | $1,520 |
| Dallas | $375,000 | $2,150 |
| Austin | $525,000 | $3,020 |
| Fort Worth | $295,000 | $1,695 |
| El Paso | $185,000 | $1,065 |
Note: Monthly mortgage estimates based on 20% down, 7% interest rate, including insurance and taxes
Rental Market Reality
The average rent in Texas varies dramatically by location and property type. Here’s what you can expect:
One-Bedroom Apartments:
- Austin: $1,450-$1,850
- Dallas: $1,200-$1,650
- Houston: $1,100-$1,500
- San Antonio: $950-$1,300
- Fort Worth: $1,050-$1,450
Two-Bedroom Apartments:
- Austin: $1,850-$2,400
- Dallas: $1,550-$2,100
- Houston: $1,400-$1,900
- San Antonio: $1,200-$1,650
- Fort Worth: $1,350-$1,800
The Property Tax Reality
Here’s something many newcomers don’t expect: Texas property taxes are among the highest in the nation. The average effective property tax rate sits around 1.8-2.2%, compared to the national average of 1.1%. This means on a $300,000 home, you’re looking at $5,400-$6,600 annually in property taxes.
However, remember that Texas has no state income tax. For many residents, the property tax burden is offset by the income tax savings, especially for higher earners.
Groceries and Food Prices in Texas
Groceries and food prices in Texas generally run 5-10% below the national average, making it easier to stick to your food budget. The state’s agricultural abundance and lower transportation costs contribute to these savings.
Weekly Grocery Budget Estimates
Single Person: $65-85 per week Couple: $110-140 per week
Family of Four: $180-220 per week
Dining Out Costs
Texas offers incredible value for dining out, especially for barbecue, Tex-Mex, and casual dining:
- Fast Food Meal: $8-12
- Mid-Range Restaurant (per person): $15-25
- Fine Dining (per person): $35-60
- Local Food Trucks: $6-12
The state’s food truck culture and competitive restaurant scene mean you can eat well without breaking the bank. Cities like Austin and Houston are particularly known for their diverse, affordable food scenes.
Transportation and Utilities in Texas
Transportation Expenses
Texas cities were built for cars, and most residents rely on personal vehicles for daily transportation. Here’s what to budget:
Monthly Car Expenses:
- Car Payment: $350-550 (average)
- Insurance: $140-180 (Texas rates run higher than national average)
- Gas: $120-160 (varies by commute distance)
- Maintenance: $75-125
Public Transportation: Limited compared to other major metro areas, but available:
- Austin: $41/month for unlimited rides
- Dallas: $96/month for all zones
- Houston: $46/month for local service
Utility Costs
Utilities and transportation expenses in Texas benefit from deregulated electricity markets in many areas, giving you choice in providers:
Monthly Utility Averages:
- Electricity: $135-185 (summer AC usage drives costs up)
- Natural Gas: $35-65
- Water/Sewer: $45-75
- Internet: $50-90
- Cell Phone: $70-120
Texas summers are brutal, and air conditioning isn’t optional. Budget accordingly — summer electric bills can easily double winter amounts.
Healthcare Costs in Texas
Texas healthcare costs generally run slightly below the national average, though this varies significantly by insurance type and location.
Insurance Premiums
- Individual Plan: $350-550/month
- Family Plan: $1,200-1,800/month
- Employer Plans: $150-300/month (employee portion)
Medical Services
- Primary Care Visit: $180-250
- Specialist Visit: $300-450
- Emergency Room Visit: $1,200-2,500
- Prescription Drugs: Generally 5-10% below national average
Major medical centers in Houston, Dallas, and San Antonio offer world-class care, often at more reasonable rates than coastal cities.
Texas vs National Cost of Living
Let’s break down how Texas vs national cost of living compares across major expense categories:
| Category | Texas Average | National Average | Difference |
|---|---|---|---|
| Housing | 88% | 100% | -12% |
| Transportation | 94% | 100% | -6% |
| Food | 91% | 100% | -9% |
| Healthcare | 96% | 100% | -4% |
| Utilities | 99% | 100% | -1% |
| Overall | 92% | 100% | -8% |
Index where 100 = national average
This data shows Texas offers genuine savings, particularly in housing and food costs. The 8% overall savings might not sound dramatic, but on a $60,000 annual budget, that’s $4,800 back in your pocket each year.
Best Cities in Texas for Affordability
Not all Texas cities offer the same value proposition. Here are the best cities in Texas for affordability:
Most Affordable Large Cities
1. San Antonio
- Low housing costs relative to amenities
- Strong job market
- Rich cultural scene
- Average cost of living: 12% below national average
2. Houston
- No city income tax
- Diverse economy
- Reasonable housing for a major metro
- Average cost of living: 8% below national average
3. Fort Worth
- Lower costs than Dallas
- Growing job opportunities
- Family-friendly communities
- Average cost of living: 10% below national average
Budget-Friendly Smaller Cities
- Lubbock: 15% below national average
- El Paso: 18% below national average
- Corpus Christi: 14% below national average
- Amarillo: 16% below national average
Premium Markets (Higher Costs)
- Austin: 2-5% above national average
- Plano: 8% above national average
- The Woodlands: 12% above national average
Budgeting Tips for Living in Texas
Successfully managing your Texas housing market affordability and overall expenses requires strategic planning:
The 50/30/20 Texas Rule
Adapt the classic budgeting rule for Texas living:
- 50% Needs: Housing, utilities, groceries, transportation
- 30% Wants: Dining out, entertainment, hobbies
- 20% Savings: Emergency fund, retirement, debt payoff
Texas-Specific Money-Saving Strategies
Energy Efficiency is Critical: Invest in good insulation and efficient AC units. Summer electricity bills can make or break your budget.
Shop Around for Electricity: In deregulated markets, compare providers annually. Savings of $300-600 per year are common.
Take Advantage of No Income Tax: Maximize your take-home pay by understanding how Texas’s tax structure benefits your situation.
Choose Location Strategically: Living 20-30 minutes outside major city centers can cut housing costs by 25-40%.
Common Mistakes People Make About Texas Costs
Mistake #1: Underestimating Property Taxes
Many newcomers focus only on lower home prices and forget about Texas’s high property tax rates. Always calculate total monthly housing costs including taxes and insurance.
Mistake #2: Ignoring Summer Utility Spikes
That $85 winter electric bill becomes $220 in August. Budget for seasonal utility variations from day one.
Mistake #3: Assuming All Texas Cities Are Cheap
Austin’s costs rival many coastal cities. Research your specific target location rather than assuming statewide averages apply.
Mistake #4: Forgetting About Car Dependency
Public transportation is limited. Factor in car payments, insurance, gas, and maintenance as essential expenses, not optional ones.
Mistake #5: Not Considering Salary Differences
While costs may be lower, salaries in some Texas markets also run below coastal city levels. Calculate your average salary vs cost of living Texas ratio before making decisions.
Making Your Texas Move Work Financially
Budgeting for life in Texas success comes down to realistic planning and understanding the state’s unique financial landscape. Yes, Texas offers genuine affordability advantages over many states, but it’s not automatically “cheap living” everywhere.
Your financial success in Texas depends on matching your target city’s costs to your income and lifestyle priorities. Austin might stretch your budget thin, while San Antonio or Houston could offer the perfect balance of opportunity and affordability.
The state’s combination of no income tax, reasonable housing costs (outside of Austin), and lower food expenses creates real opportunities to improve your financial position. However, factor in property taxes, car dependency, and summer utility costs to avoid budget surprises.
Whether you’re relocating for a job, retirement, or simply seeking a better cost-to-quality-of-life ratio, Texas offers options for nearly every budget level.
Ready to make your Texas move financially successful? Start by building a solid emergency fund to handle moving expenses and unexpected costs. Plan smarter for your Texas move with our free Emergency Fund Calculator at emergencyfundcalculator.com and ensure you’re financially prepared for your Lone Star State adventure.
What is the cost of living in Texas?
The cost of living in Texas is approximately 8-12% below the national average, making it one of the more affordable states in the US. A single person can expect to spend $2,800-$3,500 monthly on all expenses, while a family of four typically needs $5,500-$7,200 per month. The state’s affordability comes from no state income tax, reasonable housing costs in most areas, and lower food prices. However, costs vary significantly by city, with Austin being the most expensive and smaller cities like El Paso offering the best value.
What is the average cost of living in Texas?
The average cost of living in Texas breaks down as follows for a single person: Housing ($900-$1,400), Food ($280-$350), Transportation ($400-$550), Utilities ($265-$350), Healthcare ($200-$300), and Personal/Entertainment ($300-$500). For a family of four, expect Housing ($1,800-$2,800), Food ($720-$880), Transportation ($800-$1,100), Utilities ($400-$500), Healthcare ($800-$1,200), and Personal expenses ($600-$900). These figures represent statewide averages, with major cities running higher and rural areas lower.
What is the cost of living in Houston, Texas?
Houston’s cost of living runs about 8% below the national average. Monthly expenses for a single person average $3,100-$3,700, including rent ($1,100-$1,500 for 1BR), groceries ($280-$320), transportation ($450-$580), and utilities ($285-$375). A family of four needs approximately $6,200-$7,400 monthly. Houston offers excellent value for a major metropolitan area, with diverse job opportunities in energy, healthcare, and aerospace. The city’s lack of zoning keeps housing relatively affordable, though summer electricity bills can spike due to heavy AC usage.
What is the cost of living in Dallas, Texas?
Dallas costs run slightly above Houston but remain below the national average overall. A single person should budget $3,300-$4,000 monthly, with rent for a 1-bedroom apartment ranging $1,200-$1,650. Transportation costs are similar to Houston ($450-$580), but housing and dining tend to be 10-15% higher. A family of four needs $6,800-$8,100 monthly. Dallas offers strong job markets in finance, technology, and corporate headquarters, often with salaries that offset the higher costs. The DFW metroplex provides numerous suburban options for more affordable family living.
What is the cost of living in Austin, Texas?
Austin is Texas’s most expensive major city, with costs 2-5% above the national average. Single person monthly expenses range $3,800-$4,600, largely driven by housing costs where 1-bedroom apartments run $1,450-$1,850. The tech boom has dramatically increased housing costs, though salaries in the technology sector often compensate. A family of four needs $7,800-$9,200 monthly. Despite higher costs, Austin attracts residents with its vibrant culture, no state income tax, and booming job market. Consider suburbs like Round Rock or Cedar Park for more affordable options while maintaining access to Austin’s opportunities.