How Much Does It Cost to Live in Houston?

The fourth largest city in the United States, Houston is also one of the nation’s fastest growing cities with a population of 2,323,660. It ranks number three in the nation in terms of raw population growth year after year, adding nearly 250 people every day on average from 2010 through 2019, according the U.S. Census Bureau. Although those additional people are not all coming from other parts of the country—the metropolitan area adds 128 per day, on average, through births minus deaths—122 are.

So, why is Houston attracting so many new residents? For starters, it has one of the lowest costs of living for a major city and some of the nation’s most affordable housing. It also boasts a booming economy, the 27 th largest in the world, just behind Belgium. Twenty-four Fortune 500 companies have headquarters in the Houston metropolitan area, and many other major employers, including Intel, have offices here. Not to mention, these companies offer high-paying jobs in tech, healthcare, computer sciences and similar industries.

But Houston also has an excellent quality of life. Residents enjoy world class dining, a lively arts scene, pro sports teams, a Museum District and Space Center Houston. Kids benefit from an education at some of the nation’s best school districts and attend college at 14 local institutions, including Baylor College of Medicine, Rice University and the University of Houston.

Considering a move to Houston? Read on to learn everything you need to know about living in Houston.

Cost of living

According to AreaVibes, Houston has an overall cost of living index score of 94 percent, which is 6 percent lower than the national average. The cost of living index indicates how expensive (or inexpensive) it is to live in a particular city. If a city’s index score is higher than 100, then the cost of living is above average. If a city’s index score is lower than 100, then the cost of living is below average.

Houston area residents pay slightly more for goods and services, healthcare, transportation and utilities than their counterparts in other Texas communities. However, when compared to other major U.S. cities, Houston’s cost of living is substantially lower. Of the 20 largest metropolitan areas in the nation, only the St. Louis metropolitan area is more affordable than Houston. But at 2.8 million people, St. Louis’ metropolitan area is more than half the size of Houston’s 7.1 million.

Jobs

While the unemployment rate in the Houston metropolitan area is 7 percent, according to the U.S. Bureau of Labor Statistics—slightly higher than the national unemployment rate of 6 percent—the city continues to add post-pandemic jobs. In April 2021 alone, the region added 18,700 jobs, the third best April for the city on record.

Many of those jobs are in high-paying professions. The area is home to 84,560 engineers and architects and more than 84,000 workers in computer and mathematical fields. Additionally, the area has more than 350 aviation and aerospace-related companies and 8,800 tech-related firms, including more than 700 venture-backed startups, according to the Greater Houston Partnership, the primary business advocate for the region. Houston is also home to the world’s largest medical complex, Texas Medical Center.

Looking for a high-profile career at a Fortune 500 company? Twenty-four Fortune 500 companies, including Phillips 66, Sysco, Hewlett Packard Enterprise, ConocoPhillips, Waste Management and Halliburton, are headquartered in Houston.

Salary

The city’s median household income is $52,450, with a typical resident making $33,377, according to the U.S. Census data. However, if you consider the entire metropolitan area, the median household income jumps to $69,193, which is above the national median household income of $65,712. Overall, 28 percent of households make between $50,000 and $100,000, 16 percent make between $100,000 and $200,000, and 8 percent make more than $200,000.

According to Payscale, the highest paying jobs are project manager, operations manager, mechanical engineer, project engineer and software engineer.

Real estate

The median listing home price is $340,000, with an average of $172 per square foot, according to Realtor.com. This is somewhat higher than the national median home listing price of $293,000. However, compared to other major metropolitan cities, Houston remains very affordable. For example, the average median listing home price for a property in Los Angeles is $979,000, with an average price per square foot is $577. The median listing home price in Phoenix is $375,000, with an average of $230 per square foot.

There are approximately 876,504 households in the metropolitan area, with an average of 2.6 people per household, according to the most recent U.S. Census Data. If you own a home, you can expect to pay approximately $1,646 in monthly housing costs compared to the national average of $1,595. If you rent, you will pay an average of $1,041 per month for your home, which is slightly lower than the national average of $1,120. However, the overall rental occupancy rate topped 90.1 percent in May 2021, making it a landlord-friendly market.

Taxes

The state sales tax rate is 6.25 percent and applies to all retail sales, leases, rentals and taxable services. Local jurisdictions can impose up to an additional 2 percent sales and use tax for a total maximum rate of 8.25 percent. In Houston, that local tax rate is 1 percent. So, if you make a purchase in Houston, you’ll pay a total of 7.25 in sales tax.

Texas does not have a state income tax or a state property tax. However, you will have to pay local property taxes. This begins at the county level, but you also have to pay based on the school district and the local municipal utility district (MUD) where you live. The MUD tax covers water and sewage and varies depending on how old a neighborhood is. (New neighborhoods levy higher MUD taxes because they don’t have a lot of monetary reserves.) Expect to pay between 2 percent and 3.5 percent of your home’s value in total property taxes.

Transportation

According to Gasbuddy.com, the average price of regular unleaded gas in Houston is $2.66 while the national average is $3.04 (at the time this article was written). While gas is cheap, you will spend a fair amount of time on the road. According to the U.S. Census Bureau, the average commute to work in Houston is 27.7 minutes, on par with the national average commute of 27.6 minutes.

Unfortunately, public transportation is limited in Houston. The city’s light rail runs just 22 miles in a metropolitan area that spans nearly 9,500 square miles. While the METRO local bus system covers more ground, buses on lighter routes may only stop in an area once an hour. Rates on both the light rail and bus are a very reasonable $1.25 per ride.

Other reasons to move to Houston

In addition to such a low cost of a living for a major metropolitan area, Houston has a lot going for it. Here are some other things to consider when thinking about moving to Houston.

• It has great health care. Houston is home to the renowned Texas Medical Center. Covering 37 acres, the TMC campus is not only the largest medical complex in the world, it is home to the world’s largest children’s hospital and the world’s largest cancer hospital.
• It has diverse neighborhoods. Houston has 88 distinct neighborhoods, ranging from the hip, urban Midtown neighborhood to family-friendly communities like The Woodlands with its more than 130 parks.
• It is close to the beach. Downtown Houston is less than an hour’s drive to Galveston’s beaches and just 30 minutes from Sylvan Beach Park in La Porte.

Ready to move to Houston?

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