Cost of Living in Texas: Average Rent, Groceries, Utilities, and More

Cost of living in Texas: Bigger isn’t just better—it’s also affordable

If you’re considering a move to the Lone Star State, you’re in for a treat. Texas offers a mix of vibrant cities, stunning landscapes, and a friendly atmosphere that will make you feel right at home. But how does your wallet fare in this diverse state? Whether you’re looking for a cozy apartment in a major city like Dallas or to lay down roots in the suburbs like Killeen, Texas has it all. Let’s break down the cost of living in Texas, so you can plan accordingly.

Texas offers plenty of affordable options for housing

Housing costs in Texas are generally more affordable than many other states, though prices can vary widely depending on where you live. The average rent in Texas is around $1,553 per month, slightly below the national average of $1,645. Larger cities like Austin and Dallas tend to have higher rent prices due to their popularity and growing job markets. If you’re drawn to big-city living, be prepared to pay more for the convenience and amenities. However, Texas’ expansive size means there are plenty of smaller towns and suburban areas with lower costs, often below the state average. These areas still offer great amenities, space, and that signature Texas charm but with a lower cost of living.

TX housing costs: Average rents and median home sale prices

Housing costs in popular Texas cities

Arlington

Nestled between Dallas and Fort Worth, Arlington boasts a vibrant arts scene and, surprisingly, lower-than-average rents. The average rent for a one-bedroom here is around $1,140 while 2-bedrooms go for around $1,500 – much lower than the average rent in Texas, $1,553. Arlington is a fantastic spot for residents who want a taste of city life without the high cost of living that often comes with it.

Austin

Austin, the capital of Texas, is famous for its vibrant music scene, festivals, and growing tech industry, earning it the nickname “Silicon Hills.” As the city’s popularity has risen, so have housing costs, with average rents around $1,440 for a 1-bedroom and $1,750 for a 2-bedroom. Popular neighborhoods come with even higher prices, though Austin still offers a variety of housing options, from trendy apartments to charming bungalows. If you’re considering buying, the median price of homes for sale in Austin is $547,500, over $100k more than the national average.

Dallas

A city synonymous with business and culture, Dallas offers modern skyscrapers, rich history, and diverse neighborhoods. Whether you’re after the high-rises of Uptown or the quieter streets of Oak Cliff, Dallas has something to fit every taste and budget. However, expect to pay more than the average rent in Texas here – the average rent is $1,422 for a 1-bedroom and $1,841 for a 2-bedroom. But if you’re planning to buy a home, you’ll be pleasantly surprised to hear that the median sale price for homes in Dallas is $390,000, which is lower than the national median sale and much lower than Austin’s home prices.

Houston

Now let’s take a look at rent prices in Texas’ largest city, Houston. Known for its booming energy industry and diverse cultural scene, Houston combines big-city amenities with relatively low housing costs. Rent for a 1-bedroom apartment averages $1,245 and $1,569 for a 2-bedroom – the cost of living here is more affordable than other major Texas cities. Its wide range of neighborhoods provides options for every budget, making it a popular choice for people moving to Texas that want affordability without sacrificing urban conveniences.

McAllen

Nestled in the Rio Grande Valley, McAllen boasts a warm climate, a growing economy, and a rich blend of cultural influences. Residents enjoy a laid-back lifestyle with access to outdoor activities, proximity to attractions like South Padre Island, and affordable housing options. The average rent for a 1-bedroom apartment is just $850, while a 2-bedroom averages $1,065, both significantly lower than many other Texas cities. McAllen is a great area to call home if you’re looking for an affordable cost of living in Texas and modern conveniences.

Waco

Waco is another city in Texas that offers an appealing blend of affordability and southern charm, making it an attractive choice for those looking to settle in the Lone Star State. The average rent for a 1-bedroom apartment is around $1,150, while a 2-bedroom averages $1,580— on par with the average rent in Texas. Known for its rich history, vibrant arts scene, and the famous Magnolia Market, Waco provides a welcoming community atmosphere.

Utility costs in Texas vary between regions

When evaluating the cost of living in Texas, utility costs play a significant role and can vary widely due to the state’s diverse climate. Renters typically pay for electricity, gas, water, trash services, and sometimes internet, depending on the property. In cities like Houston and Dallas, electricity bills can surge during the hot summers due to heavy air conditioning use, while the cooler Panhandle regions may see higher heating costs in winter. Water expenses can also vary, particularly in areas dealing with drought conditions. Overall, utility costs in Texas generally align with the national average, but regional differences can lead to fluctuations.

Monthly energy bills in Texas compared to the national average

Groceries in Texas are more affordable than the national average

Texas is known for its rich agricultural landscape, producing a variety of goods such as cattle, cotton, and corn, which can lead to lower prices for local meats and produce. This means you can stock up on fresh ingredients without breaking the bank, whether you’re buying BBQ essentials or everyday staples. On average, Texans spend 19% less on groceries each month compared to the U.S. average. These lower prices contribute to Texas’s appealing cost of living.

In Austin, one of the pricier cities in Texas, grocery costs are still about 3% lower than the national average. For instance, a can of peaches is priced at approximately $2.58, compared to the national average of $2.62, while a dozen eggs costs $3.22, slightly below the national average of $3.47. Smaller towns in Texas enjoy even greater savings on groceries. In McAllen, for example, that same can of peaches is $2.52, and a dozen eggs will cost only $2.96.

Transportation costs in Texas are relatively affordable

In Texas, a car is typically your best friend, unless you live in larger cities like Houston, Dallas, and Austin where there are more public transportation options available. But for most people living in Texas, you’ll rely pretty heavily on a car in order to get around and run daily errands. Luckily, gas prices tend to be lower than the national average, partly due to Texas’ significant oil industry. The state average hovers around $2.70 per gallon, much lower than the national average of $3.39 per gallon, but prices are even cheaper in more rural areas. 

In addition to gas prices, you’ll want to factor in other costs like insurance, maintenance, and registration fees. And if you live in more urban areas, you’ll want to budget for parking and tolls. Overall, while transportation costs are relatively affordable in Texas, they largely depend on individual lifestyle choices and location within the state.

Texas taxes: No income tax, but higher property costs

Taxes in Texas are known for being more favorable compared to other states, particularly because there’s no state income tax. This is a major draw for many residents, allowing them to keep more of their earnings. The statewide sales tax is 6.25%, but local governments can add up to 2%, resulting in a combined rate of up to 8.25% in some areas. Property taxes in Texas are higher than the national average, which can impact homeowners, but the lack of a state income tax helps offset this for many. Overall, their tax structure contributes to a relatively affordable cost of living in Texas, especially for those not tied to homeownership.

Here is the total combined sales tax in a few popular Texas cities that we’ve been exploring:

Texas has heftier healthcare costs

Healthcare costs in Texas can vary widely depending on location, insurance coverage, and medical needs, but they tend to be higher than in many other states. Texas lacks a state income tax, yet residents often face rising healthcare expenses, particularly in rural areas where access to care is limited, leading to higher transportation costs. In major cities like Houston and Dallas, access to large hospital networks is better, but premiums, prescription costs, and out-of-pocket expenses are still significant. While Medicaid is available for low-income residents, many still encounter steep costs for medical services, contributing to Texas’ overall higher healthcare expenses. This is an important factor to consider when evaluating the cost of living in Texas, especially for those that require frequent doctor visits and medical needs.

How much do I need to earn to live in Texas?

Since the cost of living in Texas is relatively affordable, your income can go a little further here than it would in a more expensive state like California or New York. A general rule of thumb is to spend no more than 30% of your gross monthly income on housing, allowing for other living expenses. With the average rent in Texas sitting at $1,553, you would need to earn roughly $5,177 per month or about $62,100 annually. However, your income needs may differ depending on where you choose to live. Renting in cities like Austin or Dallas will require a higher income, whereas smaller, more suburban areas like El Paso or Lubbock won’t require as much.

Methodology

Average 1-bedroom and 2-bedroom rent sourced from Rent. Median home sale price, state average monthly rent, national rent prices, and cost of living data sourced from Redfin.