Cost of Living in Houston
Houston runs modestly below both the national and Texas averages on overall cost of living -- BestPlaces.net puts its composite index at 96.9, meaning day-to-day costs run about 3.1% below the U.S. average and 2.9% below the Texas average. Housing is the biggest single driver of that advantage, cited at roughly 20% cheaper than the national average.
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Learn moreThe Overall Index
BestPlaces.net's cost-of-living index for Houston (retrieved August 2026) scores the city at 96.9 against a national baseline of 100 -- a genuine, if modest, below-average cost of living for a metro this large, and one of the more affordable major Sun Belt cities on this measure. That headline sits alongside a separate, real caveat: Houston's median household income ($64,813 per one 2026 estimate, with other sources citing $60,440-$62,894) runs about 17-20% below the Texas and national medians, so a below-average cost of living is offset by below-average typical earnings, not a pure win either way.
Housing and Rent
Housing is Houston's clearest cost advantage -- BestPlaces.net cites it at about 20% cheaper than the U.S. average. Rent estimates vary by source: BestPlaces.net cites a citywide average around $1,181/month (about 27% below the national median), while rental-platform figures for a 1-bedroom specifically run higher, roughly $1,199-$1,230/month depending on source (see the renting topic page for the full breakdown) -- the gap likely reflects BestPlaces averaging across all unit types and areas, versus platform figures skewing toward listed 1-bedroom units. Treat both as directional rather than picking one as precise.
Utilities
BestPlaces.net cites Houston utilities at roughly 9% below the national average -- a genuine, if modest, advantage, though it sits in tension with Houston's hot, humid climate (see the climate-weather topic page) and the real air-conditioning load that comes with roughly six months a year of high heat and humidity. No independently sourced Houston-specific figure for typical monthly electric bills was confirmed this pass; treat the 9%-below-average utilities index as the available, if imperfect, proxy.
Taxes
Texas has no state personal income tax, a structural, statewide cost-of-living advantage covered in full on the taxes topic page. It does not offset a genuinely high property-tax and homeowners-insurance bill for owners specifically -- Harris County effective property tax rates were cited anywhere from about 1.49% to just over 2% depending on source this session, and Houston-area homeowners insurance is cited as the most expensive of any major Texas metro. A renter and a homeowner experience Houston cost of living very differently; see the property-taxes and homeowners-insurance topic pages for the numbers this summary intentionally doesn't repeat.
Key takeaways
- Houston's overall cost of living runs modestly below both the U.S. and Texas averages (BestPlaces.net index: 96.9).
- Housing is the clearest advantage (~20% below the U.S. average); rent figures vary by source ($1,181/mo citywide average per BestPlaces vs. $1,199-$1,230/mo for a platform-reported 1-bedroom).
- Median household income ($60,440-$64,813 depending on source) runs about 17-20% below the Texas and national medians -- the below-average cost of living sits alongside below-average typical earnings.
- Utilities run about 9% below the national average per BestPlaces, though the city's hot, humid climate drives real air-conditioning costs not separately quantified this pass.
- No state income tax is the biggest structural tax advantage, but it does not offset genuinely high property tax and homeowners insurance costs for owners -- see those dedicated topic pages.
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