How Texas Keeps Home Prices Low: An In-Depth Analysis

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Are you looking for affordable homes and potentially moving to a state with low living expenses? If so, you might want to look at the great state of Texas. A large amount of land in Texas means that people can purchase a plot of land and start building their dream home. But why are Texas houses so cheap in the first place?

Texas has a large amount of land, and getting building permits is a more streamlined, faster process than in other states. Texas lacks an income tax but has a strong economy. The cost of living is also cheaper in the state. Also, you can find inexpensive building supplies.

Couple outside a house in Texas

Why Houses Are Cheap In Texas

The real estate prices in Texas are lower than in many other states. Why is that so? Some possible reasons include the vast amounts of land available for housing and the lack of an income tax. In addition, Texas houses are cheap because:

  • The building permit process is straightforward and quick
  • Texas has a booming economy and job opportunities
  • The state has a cheaper cost of living

Below, you will learn more about each of these reasons explaining the affordable housing situation in Texas. 

Plenty of Land

The land in Texas is not limited in the same way that places like New York City have a finite amount of space. With a large amount of land, more people are choosing to build homes in Texas. Homeowners can pick a lot and even have acres of land to themselves.

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More housing developments are showing up. With more housing available, the supply goes up and the costs decrease. That is one reason why Texas homes are so much cheaper.

Real Estate above Austin housing suburbs - Texas View

You Can Get Building Permits Quickly and Easily

According to a building permit survey from 2020, the state of Texas had the largest number of housing permits supplied nationwide. Texas issued more than 230,000 building permits while California, a state of a similar size, issued 106,075 building permits.

As compared to other states, you can more easily and quickly get building permits in Texas. Therefore, the simplified process of getting building permits makes it easier to build homes. There are also fewer building codes and restrictions. As such, developers can spend less time on the construction.

No Income Tax in Texas

The lack of an income tax in the state also reduces the costs of Texas housing. The constitution in Texas does not allow payment of an income tax. The state relies on a high sales tax and higher property taxes instead.

That is quite different from California where residents and non-residents in the state have to pay an income tax. Generally, California has some of the highest taxes in the nation while Texas has much lower state taxes.

Residential Houses in Galveston - Texas View

Powerful Economy

Texas has a very robust and powerful economy, reaching the 10th biggest economy worldwide in 2015. The economy is the second-largest in the United States while California holds the first biggest economy. 

Essentially, if you’re looking to either open up a small business or start a new career, you will find plenty of work opportunities in Texas. Fortune Magazine featured more than 50 companies across Texas in its 2020 rankings.

Cheaper Cost of Living

As compared to other states, Texas tends to have a lower cost of living. The cost of living is 8 percent lower here than the national average. You will find that groceries are cheaper, renting a home is lower, and general consumer prices are inexpensive when compared to other places.

Even when you juxtapose the large cities of Texas like Houston to other cities nationwide, the cost of living ends up lower. 

New housing development Dallas Texas
New housing Development Dallas Texas

The Pros of Moving to Texas

So, should you move to Texas? What are the advantages of living in the Lone Star State? Some pros include the strong economy and job opportunities, asset protection laws, family-friendly neighborhoods, and plenty of entertainment. Nonetheless, there are also some cons of moving to Texas outlined below.

Pros of Moving to TexasCons of Moving to Texas
Work opportunities and a strong economyLow access to healthcare
Asset ProtectionSevere weather and hot climate
Family-friendly areasHigh property taxes and sales tax
Entertainment in urban regionsPower grid failures
Pros and Cons of Moving To Texas

Job Opportunities

While the COVID-19 pandemic initially hurt the job numbers in Texas and nationwide, by 2021, approximately one million jobs were added back. In May 2021, Texas added more than 13,000 jobs. The job recovery process and work opportunities are booming in the state.

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Texas provides job seekers or individuals looking for a career shift with one of the best economies to jumpstart their careers. 

Asset Protection Laws

You surely want your assets protected, such as your home and cars. Texas has some of the strongest asset protection laws found around the country. Essentially, if you get sued and face a baseless lawsuit, Texas state law will protect your assets from creditors laying claim to them.

The Texas Homestead Law ensures your property cannot get seized and sold. Personal property exemptions are also important regulations that keep creditors from gaining a certain amount of one’s personal property. 

High covering over back patio in Texas home - Texas View

Family-Friendly Neighborhoods

Many neighborhoods in Texas also have plenty of families with family-friendly activities. More than seven million families in Texas have an additional four million children living in these homes. You’ll find family-friendly urban neighborhoods in Austin, Dallas, Houston, San Antonio, and Fort Worth.

You will find plenty of entertainment in Texas cities for families, including live music, fun restaurants, and nature scenes to enjoy. 

The Cons of Moving to Texas

Despite the positives of living in Texas, there are also numerous downsides. Some possible problems include reduced access to healthcare and fewer opportunities to gain quality health insurance. A few other cons of moving to Texas include:

  • Drastic weather and severe climate
  • Higher property taxes
  • Failure on the power grid 

Low Access to Healthcare and Quality Health Insurance

The Commonwealth Fund released a report in 2019 with state rankings on healthcare access. Texas ranked as the 49th state in terms of healthcare access and affordability. If you decide to live in the Lone Star State, expect very high medical bills, subpar health insurance, and a lack of access to medical care. 

The state has not expanded its Medicaid coverage afforded in the Patient Protection and Affordable Care Act. That has led to much fewer insured people in Texas compared to other states. 

Houses in Port Arthur Texas Aerial - Texas View

Severe Weather and Climate

Texas has faced severe flooding in the past and is at risk of hurricanes, tornadoes, and wildfires. Certain regions face severe thunderstorms and floods. However, since the state is large, you will also find places without as much severe weather.

Texas has ranked in the top 10 states based on the number of tornadoes in 2020. As many as 102 tornadoes hit the Lone Star State in 2020. The state also sees plenty of rain and hurricane exposure. If you want to avoid severe weather, Texas might not be the best place for you.

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High Property Taxes

Because Texas has no income tax, the state relies on high property taxes and sales taxes. Texas has the 45th highest rate of property taxes in the country.

Unless you prefer high property taxes, reconsider moving to the Lone Star State.

Power Grid Failure

Winter Storm Uri, a severe winter storm in 2021, led to an intense power grid failure causing an estimated $295 billion in damage in Texas. Massive power outages took place that left many residents without heat and electricity. That led to 210 residents losing their lives due to the freezing temperatures.

The power grid was not “winterized” in Texas since freezing winter storms are not common occurrences. The power grid wasn’t up to the challenge when the snowstorm arrived.

Unless Texas fixes the power grid, the power grid failure and outages could occur again. 

Cheap Texas Housing FAQs

Here, we answer some common questions about the cheap housing available in Texas.

Why Are Houses in Texas Cheaper Than in California?

The high state income tax in California versus no income tax in Texas may play a role in the more affordable housing found in Texas. Investors have also expanded the number of developments and apartment buildings in California. As such, more Californians are renting instead of buying homes. Rent tends to cost more than purchasing a house.

How Much Money Do You Need To Buy a House in Texas?

Usually, you need to put down at least 20 percent of the purchase price as a down payment on a home. The average cost for a home in Texas in 2021 is $358,896, which means you will need about $71,780 on average for the down payment on a Texas house.


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Christian Linden is a seasoned writer and contributor at Texas View, specializing in topics that resonate with the Texan community. With over a decade of experience in journalism, Christian brings a wealth of knowledge in local politics, culture, and lifestyle. He holds a Bachelor's degree in Communications from the University of Texas. When he's not writing, Christian enjoys spending weekends traveling across Texas with his family, exploring everything from bustling cities to serene landscapes.

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