Is It Expensive to Live in Texas? A Cost of Living Analysis of Top 10 Cities

When considering whether it’s expensive to live in Texas, you might be surprised by how the Lone Star State stacks up against the rest of the nation. According to financial expert Dave Ramsey, the average cost of living in Texas runs approximately 7% below the national average—a significant advantage for those seeking affordability. While some may assume everything is pricier in Texas, the reality reveals a more nuanced picture where strategic city selection can mean the difference between financial comfort and strain.

Why Texas Remains More Affordable Than Most US States

Several factors contribute to Texas’s lower cost of living compared to other regions. Housing expenses, grocery prices, and healthcare costs all play roles in keeping overall expenses down. The state’s economic structure and tax policies create conditions where residents can stretch their income further than in states like California, New York, or Massachusetts. This affordability advantage makes Texas an attractive destination for people relocating from high-cost coastal areas.

However, not all Texas cities share the same price tags. According to data from The Council For Community and Economic Research and industry sources like Business Insider and RentCafe, significant variations exist within the state. Some cities prove dramatically cheaper than others, while a handful actually exceed the national average.

Budget-Friendly Texas Cities: Where Your Dollar Stretches Furthest

The most affordable locations show substantial savings compared to national benchmarks. At the lower end, Harlingen leads with home prices averaging $331,625 and energy costs around $201.74 monthly—placing it 21% below national averages. McAllen follows closely at $275,333 for homes and 19% below national rates, making it one of the most cost-effective options.

Amarillo residents enjoy a 15% cost advantage, with median home prices at $290,338. El Paso offers comparable value at 12% below average, hosting homes priced near $318,129. Even mid-tier affordable cities maintain strong savings: Abilene (8% below average), Waco (7% below average), and Houston (6% below average) all provide respectable housing values in the $390,000-$420,000 range.

Higher-Cost Texas Cities: Dallas and Plano Lead the Way

When examining whether it’s expensive to live in Texas’s major urban centers, Dallas stands out as the exception. With median home prices reaching $474,503 and energy costs at $215.46 monthly, Dallas actually runs 2% higher than the national average—making it the priciest option on this list. Plano follows similar trends as a major metropolitan hub with elevated costs.

The data reveals a clear pattern: larger metropolitan areas command premium prices. Midland and Tyler, though still offering good value, represent the mid-range with prices roughly 4% below national levels but higher than smaller Texas cities. This urban premium reflects greater demand, job market strength, and infrastructure development in these population centers.

The Bottom Line: Finding Your Affordable Texas City

Is it expensive to live in Texas? The answer depends entirely on which city you choose. For maximum affordability, South Texas cities like McAllen and Harlingen offer unbeatable value. For those seeking larger urban environments without excessive costs, Houston provides metropolitan amenities at prices still below national averages. Only Dallas breaks the state’s affordability narrative, positioning itself among more expensive US markets.

The variety means that whether you prioritize small-town living or major city access, Texas likely offers an option aligned with your financial situation. With 9 out of 10 cities analyzed showing costs below the national average, the state’s reputation for affordability proves well-deserved for most residents.