What it costs to own a home in Texas
A median-priced Texas home costs about $2,303 a month to own with 20% down at today's 6.65% thirty-year rate. That covers $1,755 of principal and interest, $399 of property tax and $149 of homeowners insurance. Staying inside the 28% front-end ratio lenders use takes a household income of roughly $98,699 a year.
- Median home price
- $341,800
- Monthly cost
- $2,303
- Income needed
- $98,699
- Property tax rate
- 1.40%
What sets the payment in Texas?
| Input | Texas | Context |
|---|---|---|
| Effective property tax rate | 1.40% | 7th highest of 51 |
| Median home price | $341,800 | 32nd highest of 51 |
| Average annual premium | $1,900 | on a $250k dwelling |
| Assessment cap | 10%/yr | assessed value cannot rise faster than this |
| Price level vs national | 97.1 | BEA price parity, 100 = US average |
| Appreciation, past year | -0.08% | FHFA index |
| Appreciation, past five years | +40.8% | FHFA index |
What makes Texas different
Texas has no state income tax, and property tax is a substantial part of how that is paid for. The 1.40% effective rate is the seventh highest in the country, and on the $341,800 median it works out to about $399 a month before a single dollar of mortgage.
Insurance is the second surprise. At roughly $1,900 a year on a $250,000 dwelling, Texas is among the most expensive states to insure, and the driver is hail rather than hurricane. Dallas-Fort Worth is one of the most hail-damaged metropolitan areas in the United States, and carriers have priced accordingly, with rising deductibles that are often a percentage of the dwelling value rather than a flat sum. Between tax and insurance, a median Texas home costs around $550 a month to hold before the loan is considered.
The homestead cap limits taxable value increases to 10% a year on a primary residence, which matters in the metros where values ran hard between 2020 and 2022. It applies only after the homestead exemption is filed — a step new owners routinely miss in their first year.
Prices were flat to slightly negative over the past year after climbing about 41% over five. The Austin and Dallas markets in particular gave back part of the pandemic surge, so a 2022 buyer may find the equity here comes almost entirely from paying the loan down rather than from the market.
How much income do you need to buy a house in Texas?
All four rows buy the same $341,800 house at today's 6.65% rate. The difference is entirely the down payment and the mortgage insurance it does or does not trigger.
| Down | Cash at closing | P&I | PMI | Total monthly | Income needed |
|---|---|---|---|---|---|
| 3.5% down | $11,963 | $2,117 | $261 | $2,926 | $125,406 |
| 5% down | $17,090 | $2,085 | $189 | $2,822 | $120,923 |
| 10% down | $34,180 | $1,975 | $118 | $2,640 | $113,157 |
| 20% down | $68,360 | $1,755 | — | $2,303 | $98,699 |
What is a Texas home bought in 2020 worth now?
Working backwards from today's median along the FHFA path for Texas: what that same house would have cost at the time, the rate available then, and where the loan and the equity stand today at 20% down.
| Bought | Price then | Rate | P&I | Balance now | Equity now |
|---|---|---|---|---|---|
| Mid-2010 | $162,004 | 4.74% | $675 | $82,104 | $259,696 |
| Mid-2015 | $181,348 | 3.98% | $691 | $109,756 | $232,044 |
| Mid-2018 | $211,933 | 4.57% | $866 | $143,419 | $198,381 |
| Mid-2020 | $237,522 | 3.16% | $818 | $164,137 | $177,663 |
| Mid-2022 | $297,177 | 5.52% | $1,353 | $223,205 | $118,595 |
| Mid-2024 | $331,524 | 6.92% | $1,750 | $259,043 | $82,757 |
How do wages vary across Texas?
Wages track local price levels closely. These are the metropolitan areas in Texas the calculator recognises from a ZIP code, and the pay adjustment it applies to national occupation wages there.
| Metro area | Price level | Pay adjustment |
|---|---|---|
| Austin-Round Rock, TX | 100.8 | +1% |
| Dallas-Fort Worth-Arlington, TX | 100.6 | +1% |
| Houston-Pasadena-The Woodlands, TX | 98.8 | -2% |
| San Antonio-New Braunfels, TX | 95.7 | -6% |
Run a real address. These are state medians. Put in an actual Texas address, the date it closed and the price paid, and the calculator will work out that home's payment, its mortgage-insurance dates and the equity behind it.