What Is the Cost of Living in Texas?

The Lone Star State boasts a rich culture and a vibrant American imagination. People are moving here from California, Florida and other states. So, how do their finances change when they move? It’s essential to understand the cost of living in Texas. Here’s a complete breakdown of one of the largest states in the union. 

How Much Does It Cost to Live in Texas?

The average cost of living in Texas highly depends on where you live. This state has multiple major cities and numerous small towns in between, so choose your location wisely. However, the mean can indicate costs across the state. Here are five factors to consider when examining the Lone Star State. 

1. Housing

Housing is the most essential factor because it’s likely your highest bill. This cost-of-living component should occupy 30% or less of your monthly income. If you rent, expect to pay around $1,243 per month for a one-bedroom apartment. This average puts Texas as the 18th most affordable state for renters, providing excellent value. 

Buying or building a house in Texas is feasible due to the vast land and growing suburbs. Every corner of the state has affordable housing, making it affordable. For instance, people buy $250,000 homes in Waco to live between Dallas and Austin. The land is abundant and inexpensive, so costs remain low. 

2. Taxes

Taxes are among the biggest draws for people moving from out of state. The cost of living in Texas is generally lower because the state does not have an income tax. You only have to pay the federal tax on each paycheck. Individuals and businesses gain a competitive advantage by saving money. 

The drawback comes with property tax. These levies are higher than those in most states, and they can vary significantly from county to county. The Tax Foundation says Texas ranks seventh nationally for property taxes, making it among the most expensive. Residents paid about 1.36% as their effective tax rate in 2023. 

3. Transportation

Texas is a large state, so expect to drive long distances between cities. Fortunately, transportation costs are relatively low. The state is a significant producer of oil and gas, resulting in lower production costs. Experts say Texans pay about $2.51 per gallon of gas, which is good enough for second behind Oklahoma. 

The trade-off is auto insurance rates, which can get steep. This cost-of-living factor in Texas is higher due to the state’s reputation for dangerous driving and extreme weather. Experts say Texans pay over $2,900 annually for car insurance, which is 23rd nationally. While expensive, it’s far cheaper than neighboring Louisiana.   

4. Health Care

Health care matters when considering the average cost of living in Texas. Although it may be less evident than groceries or housing, it can still be a significant annual expense. Texans pay more than the average American for health care, especially with premiums rising in 2026. Experts say residents will pay an average of $826 monthly — a 35% increase from 2025. 

Texas health care is expensive for a few reasons. The state has yet to expand Medicaid, which would lower costs for hospitals’ uncompensated care. Additionally, many Texans opt out of insurance. A 2025 report indicated that around 20% of the population remains without insurance. When people wait until emergencies, they increase the costs for others. 

5. Utilities

Utilities are crucial when discussing the Texas cost of living. Start by considering the electricity rates, which are slightly below the national average. The Energy Information Administration says residents paid 16.11 cents per kilowatt-hour — about 1.87 cents below the national average. The rate is higher than neighboring Arkansas, Louisiana and Oklahoma.

That said, Texas energy prices are volatile due to the hot summers and winter freezes. Also, it’s essential to remember that the state has heavily deregulated the energy market. Supply and demand during extreme weather lead to surge pricing for air conditioning and heating. The future of Texas utilities will also be affected by data centers and AI. 

Texas Cost of Living by City

The cost of living in Texas for families varies depending on their location, whether in a booming metropolitan area or a small town. Here are four of the state’s biggest cities and how much it costs to live there.  

Dallas

Most of Dallas proper lies within Dallas County, although it extends into neighboring Denton and other counties. The Massachusetts Institute of Technology’s (MIT) Living Wage calculator says a single adult in Dallas must make $23.06 per hour to live comfortably.  Two adults with two children must each earn at least $25.69 per hour. 

Houston

Houston is slightly cheaper than its Dallas counterpart because it’s less dense. You can find houses in the sprawling suburbs, whether in Katy or Sugar Land. MIT says a single person needs to make $21.65 per hour, whereas two adults with two kids should each earn $24.84. It’s affordable and conveniently located near the Gulf, making it a popular destination for beach lovers.

San Antonio

San Antonio is a cultural hub, thanks to the Alamo and its riverwalk. If you’re interested in the cost of living in this Texas city, check out Bexar County. The living wage for a single adult is $20.84, which is lower than in Dallas and Houston. Parents of two kids must make at least $23.94 to care for their families. 

Austin

Austin is growing diverse, attracting people for tech jobs and the terrific nightlife. Young professionals attend the University of Texas before securing jobs at companies like Apple or Oracle. It’s among the most expensive areas in the Lone Star State due to a quickly booming economy. The housing supply has yet to keep up with demand, leading to higher costs. 

Is It Expensive to Live in Texas?

Like any state, the cost of living depends on your personal preferences. You can make ends meet whether you rent an apartment or buy a house. The absence of a state income tax saves Texans money, providing opportunities to save. However, life can become more expensive if your area has high property taxes and experiences extreme weather conditions. 

Frequently Asked Questions

What salary is needed to live comfortably in Texas?

The MIT Living Wage Calculator says a single adult in Texas must make at least $21.82 per hour or about $45,385. 

Is it a good idea to move to Texas?

It’s a good idea if you desire a booming job market with no income tax. You also enjoy a diverse culture and numerous outdoor activities. 

Is it actually cheaper to live in Texas?

The cost of living in Texas is generally lower, though it varies significantly by metro area. 

What are the cheapest cities to live in Texas?

The most affordable cities include Brownsville, Wichita Falls and Harlingen.