Buying a home is one of the biggest financial decisions most people will ever make, and in a state as vast and diverse as Texas, housing prices vary widely. From the bustling metro areas like Dallas, Houston, and Austin to smaller towns and rural communities, the cost of a house in Texas depends on location, property size, and market conditions.
This article explores the current average home prices across Texas, breaks down regional differences, and highlights the factors that directly impact what buyers can expect to pay.
Cost of a House in Texas
As of 2025, the average cost of a house in Texas is around $340,000, according to market reports from statewide real estate associations and MLS (Multiple Listing Service) data. This figure is slightly below the national average, making Texas a relatively affordable option compared to many coastal states.
However, that average masks significant regional variation. For instance:
- Austin: Median home price is much higher, around $530,000.
- Dallas-Fort Worth: Homes average about $410,000.
- Houston: Median price sits at approximately $330,000.
- San Antonio: More affordable, with a median near $310,000.
- Rural Texas: Properties often list well below $250,000, sometimes under $200,000 in smaller towns.
Quick Snapshot: Average Home Prices in Texas (2025)
| Location | Median Home Price (2025) | Notes |
|---|---|---|
| Austin | $530,000+ | Driven by tech industry and rapid growth |
| Dallas-Fort Worth | $410,000 | Mix of suburban and urban housing demand |
| Houston | $330,000 | Diverse market, strong energy sector |
| San Antonio | $310,000 | Affordable compared to other large metros |
| El Paso | $250,000 | Lower cost of living, border city market |
| Rural Towns | $180,000 – $240,000 | Wide variation depending on region |
| Texas State Average | ~$340,000 | Slightly below national average |
While Texas overall remains more affordable than many U.S. states, certain metro areas—particularly Austin—have seen price spikes in recent years due to economic growth, limited housing inventory, and high demand.
Why House Prices Vary Across Texas
Housing costs in Texas are influenced by a blend of economic, geographic, and demographic factors. Understanding these can help buyers know why a house in one part of Texas might be double the cost of a similar property elsewhere.
1. Location and Economic Growth
- Austin is a prime example, where the influx of tech companies like Tesla and Apple has pushed up demand and therefore prices.
- Cities with strong job markets generally see higher home values compared to areas with slower economic activity.
2. Supply and Demand
- In major metros, demand for housing often outpaces supply, leading to price growth.
- Rural and less-populated areas may have more available land and less competition, which keeps costs down.
3. Property Taxes and Regulations
- Texas has no state income tax, but it has higher property taxes than the national average. These vary by county and can influence affordability in certain regions.
4. Type of Property
- Urban condos and townhomes often cost less than single-family houses in the same area.
- Large ranches and acreage in rural Texas may be inexpensive per acre, but total costs can add up if the property is extensive.
5. Infrastructure and Amenities
- Proximity to good schools, healthcare, and highways can significantly raise the price of homes, especially in growing suburbs.
Average Cost of a House in Major Texas Cities
To better understand the Texas housing market, let’s look at the median home prices in the state’s largest metro areas.
Austin
- Median price (2025): $530,000+
- Austin has seen some of the fastest price increases in the state, fueled by the tech sector and population growth. While prices stabilized after the pandemic boom, they remain the highest in Texas.
- Popular neighborhoods like East Austin, Westlake, and Round Rock are in high demand.
Dallas-Fort Worth (DFW)
- Median price (2025): $410,000
- DFW’s vast metroplex offers a wide range of housing options, from luxury homes in Plano and Frisco to more affordable options in suburbs like Mesquite.
- Strong employment in finance, logistics, and technology supports continued demand.
Houston
- Median price (2025): $330,000
- Houston remains relatively affordable compared to other large metros, partly due to a higher availability of land for development.
- Areas close to the energy corridor and The Woodlands tend to fetch higher prices.
San Antonio
- Median price (2025): $310,000
- San Antonio’s affordability makes it attractive to families and retirees.
- The city has a strong military presence and a growing healthcare sector, which support steady demand.
El Paso
- Median price (2025): $250,000
- One of the most affordable large cities in Texas.
- Housing prices remain stable due to slower growth compared to Austin or DFW.
Cost of New Construction Homes in Texas
Newly built homes are often priced higher than resale properties, but they come with modern features, energy efficiency, and fewer repair concerns.
- Average new construction price in Texas (2025): $380,000 – $420,000
- In metros like Austin and Dallas, new builds frequently exceed $500,000.
- In smaller markets or rural areas, brand-new homes can be built for $250,000–$300,000.
Builders also offer incentives, such as covering closing costs or providing upgrades, especially when housing demand cools.
Rural vs. Urban Housing Costs in Texas
Texas offers a unique contrast: bustling cities with skyrocketing prices and small towns with remarkably affordable housing.
- Urban Areas: Higher demand, limited space, and proximity to jobs mean higher costs.
- Rural Areas: Lower demand and more available land result in lower prices, though access to amenities may be limited.
For example, a three-bedroom home in Houston could cost $330,000, while a similar house in Abilene might be $210,000.
Cost Per Square Foot in Texas
Another way to measure affordability is cost per square foot.
- Texas statewide average: About $170 per square foot (2025).
- Austin: $260+ per sq. ft.
- Dallas-Fort Worth: $200 per sq. ft.
- Houston: $165 per sq. ft.
- San Antonio: $150 per sq. ft.
- Rural areas: Often as low as $120 per sq. ft.
This metric is useful when comparing homes of different sizes and locations.
How Texas Compares to the National Average
Texas homes remain cheaper than many coastal states but more expensive than much of the Midwest and South.
- U.S. median home price (2025): ~$390,000
- Texas median (2025): ~$340,000
That $50,000 difference illustrates why Texas continues to attract buyers from California, New York, and other high-cost states. However, Texas’ property tax burden can offset some of the savings.
Cost of a House in Texas by Home Type
Home prices vary not only by location but also by type of property:
- Single-Family Homes: $320,000 – $360,000 (state average).
- Townhomes: $250,000 – $310,000, depending on metro area.
- Condos: $200,000 – $280,000, often located in urban centers.
- Luxury Homes: Start at $700,000 and can exceed several million, particularly in Austin, Dallas, and Houston.
- Ranches and Acreage: Prices vary widely, from $2,500 per acre in remote regions to $25,000+ per acre near major cities.
Additional Costs to Consider When Buying a House in Texas
While the purchase price is the largest expense, homebuyers in Texas should also account for ongoing and upfront costs:
- Property Taxes: Texas has one of the highest property tax rates in the U.S., averaging 1.6%–2.2% of assessed value.
- Homeowners Insurance: Costs vary by region, but averages run $2,000–$2,500 annually due to weather risks like hurricanes and hail.
- Closing Costs: Typically 2%–5% of the purchase price.
- HOA Fees: Common in new developments and master-planned communities, ranging from $25 to $250 per month.
Housing Market Trends in Texas
Understanding housing trends in Texas is essential for both homebuyers and investors. Over the past decade, the state has experienced steady growth fueled by population increases, economic expansion, and inbound migration from higher-cost states.
1. Population Growth
- Texas has consistently ranked among the fastest-growing states in the U.S.
- Cities like Austin, Dallas, and Houston are attracting professionals from across the country.
- More people moving in means more demand for housing, which keeps prices elevated.
2. Migration from High-Cost States
- Californians and New Yorkers relocating to Texas often bring larger budgets, pushing prices up in competitive markets.
- This has been especially visible in Austin, where bidding wars became common during the pandemic years.
3. Interest Rates and Mortgage Trends
- Higher mortgage rates in recent years slowed down the pace of price increases but didn’t cause major declines in Texas.
- Affordability remains a concern, particularly for first-time buyers.
4. Construction and Inventory
- Texas has more available land than most states, which allows for new developments.
- However, material costs, labor shortages, and zoning regulations can limit how fast builders can respond to demand.
Affordability Challenges
While Texas is often seen as an affordable housing market, affordability is becoming more complex.
Rising Home Prices vs. Income Growth
- In cities like Austin and Dallas, home prices have risen faster than wages.
- This creates affordability pressure for middle-class families.
Property Taxes
- Texas has no state income tax, but this is offset by higher property taxes, which can strain monthly budgets.
- A $340,000 home with a 2% property tax rate means nearly $6,800 annually in taxes alone.
Insurance Costs
- Weather-related risks such as hurricanes on the Gulf Coast, tornadoes in North Texas, and hail storms increase homeowners’ insurance costs.
Student Debt and First-Time Buyers
- Many younger buyers carry student loans, making it harder to save for down payments in competitive markets.
Cost of Renting vs. Buying in Texas
For many residents, deciding whether to rent or buy is a financial balancing act.
- Average Rent in Texas (2025): Around $1,350 per month for a two-bedroom apartment statewide.
- Mortgage Payments: With current rates, a $340,000 home with 10% down could result in a $2,200 monthly mortgage (including taxes and insurance).
This gap explains why some Texans continue renting, particularly in expensive markets like Austin, where rental prices remain high but still lower than the cost of owning.
Real Estate Investment in Texas
Texas has long been a magnet for real estate investors, thanks to steady growth, no state income tax, and diverse markets.
Popular Investment Areas
- Austin: High appreciation rates, though expensive entry point.
- Dallas-Fort Worth: Strong rental demand from professionals and students.
- Houston: Large and diverse economy makes it a stable investment market.
- San Antonio: Lower prices with steady population growth attract long-term investors.
- College Towns (e.g., College Station, Lubbock): Consistent rental demand from students.
Investment Considerations
- Rental Yields: Generally stronger in San Antonio and Houston compared to Austin.
- Taxes: High property taxes can reduce net returns.
- Maintenance Costs: Weather-related wear-and-tear (hail, heat, hurricanes) can increase long-term costs.
Regional Deep Dive: Urban vs. Suburban Markets
Urban Markets
- Austin, Houston, Dallas, and San Antonio have thriving downtown areas.
- Prices are higher but so are job opportunities, cultural amenities, and resale value.
Suburban Growth
- Families are increasingly moving to suburbs like Frisco (near Dallas), The Woodlands (near Houston), and Round Rock (near Austin).
- Suburbs offer larger homes, newer schools, and safer neighborhoods, often at slightly lower prices.
Rural and Small Towns
- Smaller communities such as Abilene, Lubbock, and Tyler offer some of the most affordable housing in the state.
- However, limited job opportunities can slow appreciation compared to urban centers.
Long-Term Outlook for Housing Costs in Texas
Housing experts agree that while the Texas housing market may see periods of cooling, long-term demand will keep prices from dropping significantly.
Factors Supporting Growth
- Population expansion
- Business relocations (especially from California)
- Younger generations entering the housing market
Factors Limiting Affordability
- Rising property taxes
- Supply challenges in major metros
- Inflation in construction and materials
Predictions
- Austin: Prices likely to remain high due to strong demand.
- DFW and Houston: Expected moderate but steady growth.
- Rural Areas: Prices likely to remain stable and affordable, though appreciation will be slower.
How Much House Can You Afford in Texas?
Affordability depends on income, debt, and lifestyle.
- $60,000 annual income: Likely supports a home priced around $200,000–$250,000.
- $100,000 annual income: Can support $300,000–$400,000 homes in most Texas markets.
- $150,000 annual income: Buyers can comfortably afford homes above $500,000 in most regions.
Rule of Thumb: Housing costs (mortgage, taxes, insurance) should not exceed 30% of your gross monthly income.
Tips for Homebuyers in Texas
- Research Property Taxes: Counties vary widely; two homes at the same price can have very different tax burdens.
- Check Flood Zones: Particularly in Houston and coastal areas, flood insurance can add thousands to annual costs.
- Look at Future Development Plans: A new highway, school district, or tech hub can dramatically affect home values.
- Consider New Construction Incentives: Builders often offer discounts in slower markets.
- Work with a Local Realtor: Market conditions vary by city and even by neighborhood.
Summary of Costs by City (2025)
| City/Region | Median Home Price | Cost Per Sq. Ft. | Market Notes |
|---|---|---|---|
| Austin | $530,000+ | $260+ | Highest in Texas, driven by tech boom |
| Dallas-Fort Worth | $410,000 | $200 | Balanced mix of suburban & urban demand |
| Houston | $330,000 | $165 | Affordable with diverse economy |
| San Antonio | $310,000 | $150 | Steady growth, strong affordability |
| El Paso | $250,000 | $130 | Lower cost, slower appreciation |
| Rural Areas | $180,000–$240,000 | $120 | Very affordable, slower value growth |
| Texas Average | ~$340,000 | $170 | Below U.S. median, but high property taxes |
Final Thoughts
The cost of a house in Texas is a story of contrasts. On one hand, the state remains more affordable than many coastal areas, attracting new residents and businesses every year. On the other, rising demand in booming cities like Austin and Dallas has pushed housing prices to record highs, creating affordability challenges for local residents.
For buyers, the key is understanding that Texas is not one uniform market but a patchwork of regional economies, housing types, and tax structures. Whether you’re looking for an affordable starter home in San Antonio, an investment property in Houston, or a luxury home in Austin, Texas offers options — but each comes with its own price tag.