Texas has always been one of the favorite states for people who need a proper balance of economic opportunities and vibrancy with a low cost of living. From its vast landscapes to its mighty cities and no state income tax, families, retirees, as well as young professionals, love moving to the Lone Star State. But there’s a catch. One needs to know about the cost of living inside Texas. This article discusses housing, transportation, utilities, food, healthcare, taxes, and regional differences based on the most recent available data.
Texas Cost of Living Index: Basic Overview
As of 2024, Texas has a cost of living index of 93, meaning that the living expenses are about 7% below the U.S. average at an index of 100. More recent reports have ranked Texas as the 17th-lowest state for living costs. While this is one of the main reasons for the attraction, living in rural vs. cities such as Austin and Dallas shows huge differences.
This biggest cost of living includes housing, for which Texas still remains relatively very affordable compared to the rest of the country.
Average Home Prices in Texas
In 2024, the median value of a home in Texas was $299,467, which is less than half the U.S. average of $357,469. Cities like Houston and San Antonio are even more reasonably priced, with median home values around $270,000. Austin, the city that experienced its tech industry boom, is still above the state average at an average home value of $474,000.
Texas Rental Prices
For the tenants, the average cost of an apartment in Texas is at $1,100 and covers 823 square feet. The most costly one-bedroom rental is in Austin with a price tag of $1,500 per month; McAllen’s average charges come cheaply at $850 per month.
Property Taxes in Texas
Texas has some of the highest property tax rates in the country, averaging 1.8% of a home’s value annually, which can really add up to housing costs despite relatively lower home prices. Transportation costs are a little below average, with a cost-of-living score of 8/10.
Fuel Prices in Texas
Gas prices in Texas are always lower than the national average due to its proximity with oil refineries. As of early 2025, the average price per gallon is $3.25 while the national average stands at $3.65.
Texas Public Transport Cost
While cities like Houston, Dallas, and Austin have public transportation systems, these are far from what exists in cities like New York or Chicago. A monthly transit pass costs about $65 on average in these metropolitan areas. Most residents, however, rely on personal vehicles, which makes gas prices and car insurance critical budget items.
Utilities: Moderate but Variable
Utility rates in Texas are roughly similar to the national average, though changing with location and consumption.
Texas Electricity
The Lone Star State is the national leader in producing energy, and the citizens are charged with minimal costs. Electricity runs $139 a month for a family average. That’s just a few dollars higher than the national average of $133. Of course, summer time with all its hot air and sunshine, makes summer electric bills astronomical because of air conditioning.
Other Utilities Cost in Texas
For a 915 square-foot apartment, utility costs for water, garbage, heating, and cooling, average about $198 per month. Utility rates are a bit more expensive in rural than urban communities.
Grocery Store Prices
The state of Texas has fairly typical grocery prices similar to the U.S. average.
Average Grocery Expense in Texas
A Texas individual pays about $300 per month for groceries; a family of four pays about $850. Below are the major grocery items averaged:
- A gallon of milk: $3.02
- A loaf of bread: $3.26
- A dozen eggs: $3.18
Dining in Texas
Texas is known for its food culture, from barbecue to Tex-Mex. The cost of eating out at a mid-range restaurant averages $15 per person, which is relatively cheap compared to other major U.S. cities.
Healthcare: Slightly Below Average
Healthcare in Texas is slightly below the national average, though quality and access vary greatly between urban and rural areas.
Doctor’s Visit:
The average visit to a doctor in Texas is $106, compared with about $115 nationwide.
Premiums
An individual plan on average runs for about $470 a month; a family plan will be roughly around $1,250 per month.
Drugs Cost in Texas
Generic prescriptions and commonly used prescription medication tend to average well in their pricing. Frequently, these prescription medications cost around 5 to 10 percent less than their equivalent nationally.
Taxes: The Huge Plus
One of the main advantages of Texas is that there is no state income tax. Texans pay only the federal income taxes, which would mean a considerable amount of saving for workers and retirees.
Sales Tax in Texas
The total rate of sales tax throughout the entire state of Texas is 6.25%, while local municipalities charge an additional 2% add on. Sales tax exemption includes groceries and prescription drugs.
Property Taxes in Texas
There is no state income tax paid in Texas. Property tax remains at a considerable level. On average, homeowners pay 1.8% of the annual value of their property based upon assessment, making Texas rank 7th in property tax burdens across the country.
Regional Variations in Living Costs
The cost of living in Texas is very high in its urban centers and very low in its rural areas.
Austin:
Austin is the capital of the state and a center for technological innovation, so its cost of living is the highest in Texas. The housing price is 23% above the national average. Dining, entertainment, and transportation are at comparable prices.
Houston:
Houston is cheaper than Austin but more expensive than the state average. With a cost of living index of 96, it is close to the national average. The city has affordable housing and lower-than-average transportation costs.
McAllen:
Among all the other low-cost cities in the U.S. McAllen can be singled out for being the lowest cost in expenses. Overall, McAllen’s cost of living is 13 percent lower than that of the country. This largely comes down to cheaper housing costs, grocery shopping, and moderate healthcare expenses that make McAllen quite attractive for price-conscious citizens.
Main engines behind the performance of Texas’s economy are energy, technology, and healthcare. Increasing demand for housing, especially in urban areas, fuels higher house prices and rents. More recently, inflationary forces pushed food, utility, and healthcare costs a little higher.
All this notwithstanding, Texas is one of the nation’s most affordable states for families, retirees, and professionals: a vibrant job market, no state income tax, and rates of living that are competitive across the country.
Conclusion
This cost of living in Texas is reflective of this state’s mix of affordability and opportunity. While housing, transportation, and groceries are below or at the national average, people across the U.S. and other nations continue to flow into Texas.
Regional variation and rising costs should be considered for Austin and Dallas by prospective residents. An individual and a family can then strike a good balance between their preferences in lifestyle and budgetary requirement with careful consideration for the Texas region’s diversified offers.
