Houston relocations are up yet again, and it’s no surprise considering the city’s low cost of living.
With a metro area population of over seven million, Houston is booming. New residents are discovering the perks of living in one of the most popular cities in the Lone Star State. With a diverse population, sunny climate and plenty of entertainment options, Houston is an excellent choice for many young families and working professionals. According to labor statistics, it also has a rapidly growing job market.
Best of all, Houston‘s overall cost of living is nearly 6 percent under the national average — pretty impressive for the fourth-largest city in the nation.
Cost of living in Houston
Figuring out the cost of living index for a city requires a lot of comprehensive information and data. From accommodations and food to healthcare and goods and services, here’s how it all breaks down.
- Housing costs
- Food costs
- Utility costs
- Transportation costs
- Healthcare costs
- Goods and services costs
- Taxes
- How much do you need to earn to live in Houston?
Housing costs and average rent
Data shows that housing costs in Houston neighborhoods are 18.6 percent lower than the national average. When it comes to renting, you can’t beat the price.
The average rent in Houston is just $1,264 (up 16 percent from the local average last year) for a one-bedroom. Rent prices for studio apartments are around $1,375 and two-bedroom apartments average $1,649. Of course, rent varies depending on which Houston neighborhoods you choose to call home. Also, splurging for a fancy apartment will also drive up the cost of the rent.
Most expensive and affordable neighborhoods
According to rent statistics, the Museum District, Uptown-Galleria and Downtown Houston are the most expensive neighborhoods in Houston for renters. The Museum District neighborhood is the cultural hub of the city, home to Hermann Park, the Houston Zoo and the Museum of Fine Arts. Average apartment rent prices here range from $2,264 to $2,049. Downtown is another popular area with great dining, things to do and outdoor fun at spots like Buffalo Bayou Park.
Medical Center and Great Uptown are two other top-tier expensive neighborhoods for rent in Houston.
For the most affordable neighborhoods in the city, rent in areas like Hearthwood Condominiums, North Houston and East Houston. These are popular areas for budget-conscious renters and families seeking affordability and good schools. You can find one-bedroom housing units starting at $686 in rent and going up to $738 in these areas.
Most popular neighborhoods
If you’re looking for a happy balance between affordable rent and quality of life, you may want to consider an apartment in one of Houston’s most popular neighborhoods. The Waterford Square neighborhood, Inner Loop and Montrose are among the most popular Houston neighborhoods.
Here, renters will find apartment rent in the $1,578 to $1,265 range. But they generally are more hip, desirable areas to live in, with better access to amenities and entertainment than some of the more affordable areas. That can include trendy art and dining districts like those in Montrose, schools, parks and more.
Buying a house
When you’re ready to buy a house in a local neighborhood, Houston offers some of the lowest home prices in the nation among large cities. Data provided by sister company Redfin shows that the median cost for a single-family home is around $312,000. In other cities like Austin and Dallas, average home costs vary from $405,000 to $581,000. San Antonio is a little more affordable than Houston. The homeowner’s market here is also not as cut-throat as in other major cities, giving you better chances to score your dream house in your dream neighborhood.
Food costs
The cost of living in Houston for food is cheaper than in other parts of the country. Average food prices are nearly 4 percent lower than the national average.
A dozen Grade A eggs typically cost just $1.55, while a loaf of whole wheat bread runs around $3.62 and a pound of ground beef is $4.14.
Unfortunately, the price of some basic grocery items here is higher than in other major Lone Star State cities. While a half-gallon of milk in Houston will cost around $2.04, it would be $1.98 in Austin.
Not a fan of cooking at home? Texans love to eat out and typically do so up to seven days a week. According to data from Zagat, Houston locals dine out more than any other city in the nation.
Utility costs
Utilities are the only cost of living factor that’s higher than the national average. All those hot Houston summers will run up your electricity bill. On average, Houstonians should expect to pay around $194 per month on total energy costs — 7.4 percent higher than the national average.
Houston operates with a privatized energy distribution model. Consumers can save money by comparing energy providers like CenterPoint Energy or TXU Energy.
Impressively, Houston gets 92 percent of its power from renewable energy sources like solar and wind. That puts it up there with places like San Francisco as a leader in renewable energy usage.
Transportation costs
Houston is largely a commuting city, so having a car is necessary for many parts of the metro area. But it still does have a reliable public transit system. If you live closer to downtown, you can get around primarily relying on public transportation or by walking and biking. Houston has a fairly decent walk score of 55 and bike score of 53, though the city’s transit score is just 46 out of 100.
Luckily, data shows that transportation expenses in Houston are almost 4 percent cheaper than the national average. So, if you do need to use or rely on public transit, it’s affordable.
The METRO system’s fares for local buses or METRORail is just $1.25 per ride or $3 for a Day Pass. Frequent riders can use a METRO Q Fare Card that acts as a digital wallet. It also grants users free unlimited transfers for up to 3 hours after starting their trip.
If you own your own vehicle, getting around on Houston’s major toll roads will cost you between $0.50 and $1.75 per segment of highway. Most drivers opt for the EZ TAG automatic toll pass.
Parking in downtown Houston is pricey. Monthly parking rates vary by location but you can find deals for as little as $50 a month in low-demand areas. Meanwhile, average rates in high-demand areas range from $150 to $400.
Gas prices and car repair costs
Houston’s gas prices are some of the cheapest in the nation. A gallon of regular unleaded averaged $2.40 in 2021. However, this is subject to change and market volatility.
Auto maintenance is also affordably priced at just $55.89 for a tire balance service.
Healthcare costs
The cost of healthcare in Houston is 3.6 percent cheaper than the rest of the nation, despite offering some of the best world-class facilities. Houston hospitals often score top-ranking positions in U.S. News & World Report’s “Best Hospitals Honor Roll and Medical Specialties Rankings” list.
While calculating an average cost for unique individual healthcare needs is difficult, you can get a good idea of the price of medical expenses in Houston by looking at the average cost of some basic services. A visit to the doctor is around $92, while an optometrist appointment costs just under $100 on average and a dentist visit just over $107.
Meanwhile, an OTC medication like Ibuprofen costs an average of $9.83. Also, the average cost of prescription drugs comes in at just under $472 (without insurance).
Just as with your own personal healthcare costs, pet care costs less in Houston. A typical vet visit should run just about $54.
Goods and services costs
The price of other miscellaneous goods and services in the Houston area hovers just above the national average (0.8 percent). Nearly everything from your mechanic to your clothing will cost about the same as it would elsewhere.
Houston is home to plenty of entertainment options, so date night here is affordable. Movie tickets are reasonably priced at $9.63 per ticket, even lower than other in-state metro areas like El Paso and Dallas.
Personal care expenses are also cheaper in Houston. A basic haircut comes in at an average of $21.69, while a visit to the dry cleaners will cost an average of $9.47.
Taxes
In Texas, you’ll have no state income tax munching away a large portion of your paycheck. However, if you’re a homeowner, you may use some of that larger take-home pay on property taxes. Texas has the seventh-highest property tax rate in the nation.
Texas does have a state sales tax, which is 6.25 percent. Various other taxes like county or city can bring that up to 8.25 percent.
The Lone Star State also typically holds an annual sales tax holiday in the fall for clothing and back-to-school supplies and another in the spring for emergency preparation supplies.
How much do I need to earn to live in Houston?
Financial experts advise keeping your rent or other housing expenses under 30 percent of your total household budget. You want to have enough for rent and to still live comfortably and enjoy city life. Considering the average rent in Houston is $1,264, that means you would need to make at least $50,560 to reasonably afford a one-bedroom apartment to rent in Houston.
Since the average annual salary in Houston is $74,000, you can cover rent in Houston comfortably and have plenty left for all other Houston costs of living expenses.
To help determine how much rent you can afford based on your annual salary, check out our handy rent and cost of living calculator.
Living in Houston
The cost of living in Houston is a bargain for those used to high prices in other urban areas. All categories except for utilities run lower than the national average. Everything from groceries to food is affordable. Living in the city, Houston locals have access to everything from great dining to world-class art. Plus, the average rent in Houston will feel like a breath of fresh air to many transplants.
For these reasons, relocation to Houston in 2022 is a great move.
