How Much House Can I Afford in Texas?

Texas is one of the most sought-after destinations for corporate relocations and population growth, driven primarily by its lack of state income tax. However, Texas's reputation for low taxes is complicated when it comes to housing: the state has one of the higher property tax rates in the country at 1.63%, and homeowners insurance averaging $4,100/year ($342/month) due to severe storm, hail, and tornado risk. Together, these ongoing costs substantially reduce the affordability benefit of the no-income-tax advantage.

Texas's four major metros vary significantly. Austin (Travis County) has become one of the most expensive markets in the Sun Belt, with median prices of $500,000–$650,000 in the city and desirable suburbs (Round Rock, Cedar Park, Georgetown). Dallas-Fort Worth (Collin, Tarrant, and Dallas counties) offers a broader range at $350,000–$600,000 in most suburban markets. Houston (Harris County) is the most affordable major Texas metro at $300,000–$400,000 median, partly due to abundant developable land. San Antonio (Bexar County) sits around $280,000–$360,000.

Texas has a homestead exemption that exempts $100,000 of a home's appraised value from school district taxes and $40,000 from other property taxes for owner-occupied primary residences. This exemption provides meaningful relief — on a $330,000 home, the school district exemption alone can save $1,000–$2,000/year depending on the district's tax rate.

Texas State Affordable Housing Corporation (TSAHC) offers the Home Sweet Texas and Homes for Texas Heroes programs with down payment assistance of 3%–5% of the loan amount, available as a forgivable grant or a low-interest second loan. These programs are available statewide and require income and purchase price limits.