Texas is a big state – the second-largest state in the United States. It is an easy thing to say, but it’s hard for many people to conceptualize. To put it into perspective, you could drive at highway speeds in Texas for eight hours and still be in Texas on the other end of your drive.
This sheer size makes it so hard to pin down what an overall cost of living would be. If it weren’t so big, all you would need would be a chart with numbers by county. But Texas is so big and market-dependent that living costs amount to whatever people are willing to spend for their expected quality of life.
Real Estate Market in Texas
First, we’ll take a look at the real estate market. The Texas real estate market is as wildly varied as the state’s size would suggest, with a diverse range of homes and lots to choose from. If you’re wondering who will buy my house in Texas, there are plenty of options. An $83,000 two-bedroom in Longview is as average as a $1,285,000 four-bedroom in a Fort Worth suburb. Here are cash home buyers in Longview homeowners love.
To understand how this can happen, you need to know some things about Texan economics. A massive draw for people moving to Texas is that it has no state income tax. For years, this has drawn both individuals and the companies they work for to the state. When the companies and executives move, they take the jobs with them, which prompts other people to move as well.
People with higher earnings will almost always be approved for mortgages. There’s a lot to consider to avoid running into a mortgage problem. In more gentrified areas, real estate prices will skyrocket; the market can bear them. But in lower-income neighborhoods, housing prices can only go so high. In Tyler, Texas, the market is hot – there are companies that buy houses in Tyler that homeowners need to get rid of fast.
The trade-off for having no income tax is high property taxes. They may not sound like much on paper. But spread out over the cost of a house, that percentage adds up to tens of thousands per year. The state will naturally be unwilling to improve infrastructure in areas where it gets less in property taxes.
Areas with more funding will have better roads, schools, plumbing, and so on, while the areas with less funding keep deteriorating. If you’re relocating within Texas, consider selling a house for cash. Remember, it’s wise to move to an area with a lower cost of living.
Cost of Living in Texas
So, what are the actual numbers here? Let’s look at a more detailed breakdown.
Bills and Utilities
It’s pretty telling that the official page for moving to Texas lists ways you can save money on your electricity bill as a focal point. Texas is all about that market-driven choice, but in many cases, the area you live in will determine what you have to pay out.
On average, you’ll be paying $409 a month for combined utilities. But there’s very little regulation in place to keep this number from going any higher. Utility costs will vary depending on the time of year and location within the state.
An average commute in Texas is about 26.4 minutes long. This factors in the local speed limits, by the way, so expect to be driving quite a bit. While public transportation exists in Texas, it may be challenging to find it dependable. People often opt to purchase a vehicle or take other modes of transportation such as Uber. All that cost adds up.
Long commutes combined with a lack of carpooling and cheap, reliable public transport means that Texans spend $350 a month commuting alone. And again, this number can and will go higher if you buy a cheaper house far from a city center, or if you don’t have a car.
Housing Prices in Texas
The average rent in Dallas is $1,474, while in Waco, it’s $1,171. So average monthly rent in Texas isn’t so bad on the surface, but you’ve heard about the lack of rent control and don’t want to subject yourself to that as a renter. What about a house?
A luxury home in Texas – or a decently big home in the best neighborhood – can creep up into the millions. At the time of writing, interest rates are sitting around 5% for a 30-year fixed-rate and trending upwards as time goes on. Mortgage rates upwards of $6,000 a year for the most excellent houses in the best neighborhoods are high, but that’s relatively normal.
If you opt for a small, single-family home, not in a city center, a mortgage payment of $308 a month or $50,000 for purchase may be what you’re looking at. So the average home price sitting at a cool $1,675 a month for a $257,628 home doesn’t even begin to tell the whole story there.
Housing costs do fluctuate with the shifting market. Texas cities, for example, may have more expensive homes, but the overall cost of living in rural areas is higher than the U.S. average. The median home price in metropolitan areas of Texas is $376,373 – certainly better than the average in California!
Food and Shopping
On average, you’re going to be spending $453 a month on food for a single person or $1129 a month for a family of four. That may not sound like much, but it adds up when transportation and availability are considered if you’re living far from central life. A trip to the grocery store could be an all-day adventure if you’re far from civilization. Food insecurity in Texas is an unfortunate reality for millions of residents.
While rural areas may experience food insecurity, the food in Texas is fresh and of high quality. You may have to get creative with your meal prepping when it comes to availability, but most grocery stores have a wide selection of fresh produce and all your favorite brands. In Austin and other major cities, you’re likely to spend less than the national average on your grocery bill, so be sure to keep that in mind.
Health and Medical Costs
Health insurance in Texas seems cheap, but it comes at a steep cost. For family coverage in Texas, you pay an average of $6,950 per year. But the average cost of deductibles in 2020 added up to $9,311 per year. And that’s not counting the procedures you have to drive out of state for.
Texas does have excellent medical facilities. Houston alone has some of the best hospitals in Texas, including the Texas Medical Center, which boasts the largest children’s hospital in the world. Healthcare is a vital factor to consider when contemplating costs of living, but quality patient care can make up for steep healthcare costs.
Average Cost of Living in Texas
So, what does the total cost of living for a family of 4 in a single-family average home with a family insurance plan not tied to work come to?
$4,142.17 per month.
Let’s go back one more time and look at how that number can fluctuate.
You’re going to spend more in the summer months, for example, because of how energy prices are tied to demand. Everyone’s running their air conditioning. Everyone’s inside. Demand soars, and companies inflate the price because people will pay it. Summer heat in Texas is almost guaranteed to reach dangerous levels every year.
Then there’s the infrastructure. The roads in Texas are often under construction, so you may pay some costs on car repairs if you own a vehicle and use it frequently. You’ll also have to consider a longer commute because of potholes or construction.
On a positive note, gas in Texas is lower than average national costs, but keep in mind that there’s a $0.20 per gallon gas tax and a state sales tax of 6.25%. Personal property taxes can also apply to anything you own that’s used to make an income.
If you keep in mind your household income, living in Texas could be the right move for you. Many states come with a certain amount of caveats that affect the cost of living, and no state is entirely perfect. Despite many of the drawbacks, Texas has a lot to offer.
The average cost of living can’t tell you how well-suited to life in the lone star state you’ll be. It can only tell you whether you’d be able to afford the bare minimum of what it takes to live there. Texas is a beautiful place with a lot of state pride – and no wonder people are proud to live there! It has a relaxed atmosphere with a rich cultural history.
The sheer diversity of what Texas offers means that you can probably find a place you’d like to live. There will always be a place where it’ll be both cost-effective and pleasant for you to exist there.