Cost of Living in Texas
Texas's cost of living is shaped by a genuinely low overall tax structure funded by sales and property tax rather than income tax -- but statewide averages mask real, substantial regional variation between Austin's tech-driven cost inflation, Houston's comparatively affordable major-metro housing, and rural West Texas's lower costs across the board.
Exploring the idea of moving?
We can connect you with a local real estate professional who knows the area -- no pressure, just a starting point.
Learn moreNo income tax, but a real, above-average property-tax and insurance burden
Texas's genuinely low state and local sales tax structure (6.25% state base, combined rates up to a statutory cap of 8.25%) and total absence of personal income tax are real advantages. But Texas's average effective property tax rate (roughly 1.60%, sources cluster 1.40%-1.63%) runs well above the roughly 0.91% national average, and homeowners insurance (statewide average cited around $4,350/year for 2026) also runs above the national average once regional risk is factored in. Texas does not offer a uniformly low overall cost of living just because there's no income tax line -- see the property-taxes and homeowners-insurance topics.
Austin's tech-driven cost inflation is a real, disclosed exception to Texas affordability
Austin's deep, diversified tech-sector job base (Tesla, Apple, Samsung, Dell, IBM, Google, and Amazon all maintain major Austin-area operations) drove real, substantial housing-cost inflation through 2022 -- though this record notes Austin has seen a meaningful price correction from that 2022 peak, opening real negotiating room that did not exist a few years ago. Austin should not be assumed to carry the same affordability as Houston, San Antonio, or most of the rest of the state.
Houston, San Antonio, and El Paso offer genuinely more affordable major-metro living
Houston's no-zoning land-use model translates into real, above-average housing production and comparatively affordable prices for a metro its size, on top of a genuinely deep, diversified job base in energy and medicine/life sciences. San Antonio and El Paso likewise run more affordable than Austin or Dallas-Fort Worth's premium submarkets -- El Paso in particular combines a low cost of living with a property-tax rate this project's research found to run among the higher end for Texas metros despite that lower overall cost profile, a real, disclosed exception worth confirming directly.
County-level sales and property tax variation means no single Texas cost figure applies
Because Texas funds government through sales and property tax rather than income tax, your specific county and school district -- not a statewide average -- determine much of your real tax burden. Combined sales tax rates and property tax millage both vary by locality; confirm your specific target county and district directly rather than budgeting off one statewide Texas cost-of-living figure.
Key takeaways
- Texas's no-income-tax structure is real, but property tax (roughly 1.60% average effective rate) and homeowners insurance both run above the national average -- there is no single low-cost-of-living Texas figure.
- Austin's tech-driven cost inflation is a real, disclosed exception to Texas's broader affordability, though a meaningful price correction from the 2022 peak has opened real negotiating room.
- Houston, San Antonio, and El Paso offer genuinely more affordable major-metro living than Austin or Dallas-Fort Worth's premium submarkets.
- Confirm your specific target county and school district's combined sales and property tax rates directly -- Texas cost of living is genuinely local, not one statewide number.
Want to know what your budget actually buys here?
Tell us a bit about what you're looking for and we'll connect you with someone local who can walk you through real numbers.
Get local guidanceRead the full Texas overview for the complete picture, or explore individual cities and towns we've researched.
Planning a move?
Tell us what you're looking for and we'll connect you with a local expert who can help you make it happen.
Talk to a local expert