10 Reasons Houses Are Cheaper In Texas?

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Why are homes in Texas noticeably less expensive than in other states? From lower taxes to its dynamic landscape, we’ll explore what makes Texas a desirable destination for those looking for more affordable housing.  

Why Are Houses In Texas So Cheap?

While the housing market has seen an influx in recent years, the state of Texas has remained relatively affordable. For example, in 2022, the median home price in Texas is $349,000, whereas, in states such as California, homes are being sold for around  $799,000. So whether you compare coastal or western states such as Colorado ($591,000) and Montana ($448,000), Texas remains below the national average for median home prices. 

1. Lower Taxes

One reason contributing to a lower cost of living and affordable housing is that Texas has no state income tax. Texas is one of seven states in the U.S. to not have an income tax. In comparison, as of 2022, the states with the highest income tax rate are Minnesota (9.85%), New York (10.90%), and California (13.30%). 

While Texas may have higher sales and property taxes than most states, when you compare the overall numbers, Texas still beats the competition. As a result, more of your hard-earned money stays in your pocket in Texas. So, as you begin the search for your dream home, you can factor the lower taxes into your budget and purchase a larger home for less. 

2. More Relaxed Codes & Regulations

A few states across the country have relaxed building codes, and Texas is one of them. Endless permits and red tape do not hold up developers and construction crews. Consequently, homes are built faster, increasing the supply and keeping overall home prices more affordable. 

3. Larger Availability of Land

It’s no secret how incredibly large the Lone Star state is. With vast available land to build new homes, supply remains high, and prices are lower compared to densely populated states like New Jersey, Massachusetts, and Florida. So whether you’re looking for a quaint 1-acre lot near amenities, or 20 acres of rolling Texas hills, you can find an affordable plot of land that suits your family’s needs. 

4.  Lower Cost of Living

Coastal states such as New York, California, and Hawaii have a higher cost of living due to increasing population density and demand for housing. In addition, the states have higher grocery costs, taxes, and costly public services. Comparably, midwest and southern states like Texas are cheaper places to live. For example, Texas is currently rated 16th on the cost of living index by a recent survey conducted by the Council of Community & Economic Research. The survey analyzed multiple factors, including health care, housing, food costs, transportation, and childcare. This lower cost of living makes higher monthly mortgage payments seem more affordable as Texas residents save more of their hard-earned income. 

5. Stronger State Economy

Texas offers diverse opportunities for professionals to thrive, with a handful of industries driving the economy, such as agriculture, government and defense, aeronautics, energy, tourism, and, most recently, high-tech industries. From small businesses to Fortune 500 companies, the state’s economy is the second largest by GDP in the United States.  

Despite the influx of small and large businesses moving to the state, Texas maintains a steady supply of housing, keeping home prices affordable. When a bustling economy is paired with increased availability of land and no state income tax, it gives Texas residents more money in their bank accounts to purchase larger houses. 

6. Cheaper Labor

The labor force in Texas has increased overall across a variety of industries in recent years. In particular, the number of construction workers in Texas has been rising since March 2022. The abundance of workers in the construction industry has kept labor costs (and, more importantly, construction costs) down, as many work at or below the minimum wage in Texas. 

7. Higher Availability of Building Supplies

Texas is known for having a high availability of construction materials. With a booming housing market, materials such as sand, stone, and lumber are easily accessible for construction crews to get their hands on. As a result, while construction prices have increased in recent years, the ample supply of materials in Texas has kept prices in check. 

8. Lower Rental Costs

While the larger cities in Texas may have higher monthly rental costs, you can find lower prices just outside the city. This has the effect of causing renters to stay in their homes longer and reduces the demand to move or purchase a house of their own. Buying a home can take a considerable upfront investment. If renters are happy with their moderate monthly rent, they may be deterred from leaping to purchase a home. 

9. Longer Construction Seasons

While Texas does experience winters, they tend to be relatively mild. With longer suitable construction seasons, houses can be built year-round. This allows builders to keep up with demand, and it keeps houses cheaper in Texas as construction isn’t limited to a few short months like in some northern states. 

10. Greater Abundance of Rural Country Terrain

Texas has a dynamic landscape full of rolling hills, desert grasslands, lowland forests, and coastal plains. While the geography of Texas differs across the state, most of the state consists of rural country terrain. There are no sought-after mountain top views to drive up home prices. Instead, the rolling open landscape provides plenty of opportunities to spread out affordably. 

So if you’re ready to start looking for your affordable dream home, check out Lakeside at Tessera. Contact our office today to schedule a tour of our custom-built homes tucked into the beautiful Texas Hill Country. 

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