The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
It’s the biggest town in a big state, and nationwide it’s no piker either. Houston is the fourth largest city in the country — and also the biggest metropolitan area in the United States without a state income tax. Boasting a plentiful array of everything from restaurants to sports teams, it’s one of the best places to live in Texas (and, some would say, anywhere).
Houston does have a few drawbacks, namely a high hurricane risk and a significant lack of public transit options for a city its size. But If you’re willing to overlook those issues, you’ll benefit from mild winters and a cost of living that, for a cosmopolitan area, is low: 23.85 percent lower than in Chicago, the next largest city in the U.S. (by population), for example. Overall, the cost of living in Houston runs about six percent lower than the national average.
The cost of livin’ is easy throughout Texas, which has attracted plenty of transplants during the pandemic — from employees able to work remotely to early or new retirees. As a result, buying a house in Texas has become significantly more expensive in the last two years.
Still, as urban areas go, Houston isn’t bad (it’s not even the most expensive town in Texas — that honor belongs to Plano). The median home sale price in greater metropolitan areas, as of September 2022, was $310,000, according to data from Redfin. Considering the nationwide median home sale price for the third quarter of 2022 is $144,900 higher at $454,900, it’s easy to see why buying a house in Houston is an attractive option. The city has programs to aid low-income borrowers, too, and Texas itself has several state-wide programs to help first-time homeowners.
Although the pace of sales is slowing down, homes do go relatively fast in Houston, spending on average less than a month (26 days) on the market, according to Redfin data for September 2022.
Average rent in Houston is similarly affordable compared to most other cities of similar size. As of November 5, 2022, the average rent for a one-bedroom apartment in Houston, Texas was $1,350, according to the rental website Zumper.
The job market in Houston is relatively strong with several Fortune 500 countries headquartered in the city.
The Bureau of Labor Statistics listed the local unemployment rate in September 2022 as 4.2 percent, only slightly higher than the nationwide unemployment rate of 3.5 percent during the same time period.
Census data for 2020 listed the median household income in Houston as $53,600 (though that probably doesn’t reflect any pandemic-fueled increases in wages).
Food costs are significantly lower than in the rest of the country, with the Bureau of Labor Statistics (BLS) finding that the average Houston household spends 9.3 percent of its total budget on food, compared to the nationwide average of 12.2 percent.
Houston isn’t just an affordable city to eat in. It’s also a delicious one, frequently showing up on lists of “top foodie cities in the country.”
Spanning over 660 square miles,Houston is a notoriously car-dependent city with some of the biggest interstates in the country. The Katy Freeway, which runs from Houston to the nearby suburb of Katy, is one of the widest freeways in the world, with sections of it spanning 26 lanes.
The city center does have a metro line and bus system with fares varying from $1.25 to $8 per ride, but the routes and schedules are minimal compared to other burgs.
If you’re planning to live or work outside of downtown, you’ll likely need to factor car ownership, maintenance and insurance into your budget. Car insurance in Houston is typically higher on average than in the rest of Texas, which already has higher car insurance rates than the rest of the country.
Local, state, property taxes and fees
Texas has no state income tax, but the average property tax in the state is relatively high at 1.80 percent. The sales tax rate in Texas is 6.25 percent, and the city of Houston has an additional 1 percent sales tax for a combined total sales tax of 7.25 percent for goods purchased within city limits.
Moving to Houston
The cost of moving to Houston depends on where you’re moving from, your household size, and how much stuff you have. Find a great local real estate agent to work with, so you can find the best neighborhood and buy a house that fits your needs, as well as your budget.