Stretching Your Dollar in Texas: The Factors Behind Its Affordability (2024)

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It’s cheaper to live in Texas than in many United States places. Every city besides Austin is below the national average in cost of living. Many cities are 8% to 10% cheaper than equivalent locations in other states, depending on where you plan to move.

Texas is so cheap because there’s so much land for housing. There are plenty of building supplies available for new homes. The cost of living is affordable, as the state has low tax rates, and a strong economy. These reasons make Texas a cheap state and a great place to live.

Why Is Texas So Cheap?

Texas is a state with a cheap cost of living because there’s so much available land. Residents aren’t fighting over property, driving up the demand and causing housing prices to increase drastically.

These primary factors are what keep Texas so cheap:

• No state income tax
• Plenty of available lands
• Surplus of building supplies
• There are few restrictions on building codes

These four features result in Texas having a low cost of living. There is plenty of land for the population to grow comfortably. With such room for expansion, housing costs stay relatively low across the board.

Taxes

Many people want to move to Texas because there’s no state income tax. You’ll keep more of your employment income because you only have to pay federal income tax. The lack of state income tax means you keep your money and only have to file taxes at the federal level, saving time and effort.

Even the sales tax is relatively low, at just 6.25%. Each area can add up to 2% to that tax rate, so you’ll never pay more than 8.20% on a purchase. The average sales tax rate across the United States ranges from 4% to 7%, so Texas is right in the middle.

There’s not a statewide property tax, either. The property appraisals rate the land at full market value, and each county uses that assessment to factor in taxes. The property tax rate varies by county, with an average rate of 1.80%. The highest property tax rate is in Fort Bend, with 2.23%.

Available Land

The low property tax rate is good considering Texas’s available land. It’s the second-largest state in the nation, just behind Alaska. There are more than 268,000 square miles of land in Texas.

However, since Texas is so large, some areas remain undeveloped. People who need to work in large cities aren’t drawn to rural areas because of the commute. Much of the available land is far from the conveniences of big cities, so you have to weigh the pros and cons before you move.

Since there’s so much space available, residents rarely fight over properties. You’re more likely to find a decent home at a great price without entering a bidding war. At a time when houses are going for high above market value, buying in Texas ensures you’ll get the most house for your money while staying within your budget.

Building Supplies and Codes

Texas has a surplus of sand and gravel, so it’s affordable to use concrete as a building supply and add gravel to your driveway and landscape. Building resources are easy to find across the state, so you’ll pay less for fuel and transportation. In turn, this reduction keeps your building costs low.

Texas also has very few restrictions in terms of building codes. You don’t need to file as many permits to build or add to your home. It’s easier to hire a contractor because there’s not as much paperwork to trudge through compared to other locations. That means contractors are more affordable and can work faster, streamlining the building process.

The weather also impacts building costs. Because that season is mild in Texas, you don’t need to worry about thick insulation to keep you warm during a cold winter. You don’t have to worry about a roof that can withstand snow and ice. Make sure your air conditioner can cool your home, and you’re good to go in Texas.

Does Texas Have a Lower Cost of Living?

Texas has a lower cost of living, with most cities having an average that’s 8% lower than the United States average. Even large urban areas are about 2% lower than average. It doesn’t have the lowest cost of living in the nation—that honor belongs to Mississippi. But Texas has many benefits you can’t find in other states.

State Income Tax

There’s no state income tax in Texas. Residents only have to pay federal taxes on their income, so they’ll keep more of their salary compared to people in other states. The lack of state income tax, combined with low sales tax and no to little property tax, makes the cost of living very affordable.

Affordable Rent and Home Prices

You can find houses available for less than $150,000 in many cities in Texas, including:

• Abilene, with a median price of $148,000
• Amarillo, with a median price of $147,000
• Beaumont, with a median price of $124,000
• Brownsville, with a median price of $118,000
• Wichita Falls, with a median price of $116,000

You can rent an apartment for less than $1,000 monthly in many locations, including urban areas and rural towns. They include:

• El Paso, with an average rent of $837 a month
• Killeen, with an average rent of $920 a month
• Laredo, with an average rent of $850 a month
• Lubbock, with an average rent of $955 a month
• Waco, with an average rent of $862 a month

These cities have a lot to offer, whether they’re cultural hotspots or just far enough away from the hustle to let you kick back and relax. All ten cities listed above have populations of over 10,000 people, so you’re not going to be living in a small town with no sense of community.

Living Wages

Texas minimum wage is just $7.25, but some businesses pay more than that. With such a low cost of living, having a high-paying job is not necessary to make ends meet in Texas. In many cities, two people making minimum wage can share expenses and live comfortably.

To ensure you can stretch your paycheck, you must consider more than just rent in Texas. Also, check out the average grocery prices and transportation you need to get to the store. You must also factor in utility costs with hot summers and mild winters.

Cheap and Popular Texas

Texas is one of the most rapidly growing states in the nation. Between 2010 and 2019, over four million people moved to Texas. The state has over 28 million residents, making it the second most populated after California.

Strong Economy

Texas has an extensive exporting business, giving it a strong economy for years. It exports goods to other states and around the world, which helps create a robust job market in the state.

Cultural Diversity

There’s a lot of diversity in the state, with residents speaking more than 145 different languages. Texas is one of the most diverse states, second only to California. This rating includes cultural, socioeconomic, and religious diversity.

You’re sure to fit in when you move to Texas, and you can expand your knowledge by meeting people from all different backgrounds.

Varying Landscapes

You can choose from different landscapes when you move to Texas. Austin is a bustling city with plenty of entertainment options and exciting nightlife.

But you could also choose to live in a desert landscape or the grasslands and see the land stretching out around you. Even these peaceful locations can still be relatively close to a major city for convenience.

Texas Living FAQ

You’ve learned a lot about the cost of living in Texas and why the state is so cheap. Before you make your move official, check out the answers to these frequently asked questions.

References:

• https://www.salary.com/research/cost-of-living/tx
• https://comptroller.texas.gov/taxes/property-tax/
• https://taxfoundation.org/state/texas/