Housing market snapshot: Texas
Texas spans high-growth metros (Dallas - Fort Worth, Austin, Houston, San Antonio) and far more affordable secondary markets. No state income tax shifts more of the housing cost into property taxes and insurance. With an indicative median near $350,000, Texas sits in the middle of the national price distribution. Small rate changes move the payment more than many first-time buyers expect.
Property taxes and homestead notes
Texas's average effective property tax rate of roughly 1.60% ranks among the higher statewide averages nationally. On a median-priced home, taxes can rival or exceed the insurance line item in your payment. Texas property taxes are among the higher effective rates nationally. Homestead exemptions (general, over-65, disability) and appraisal caps for homesteads can help - file with your county appraisal district.
Homeowners insurance in Texas
Indicative average homeowners insurance around $2,400/year is elevated versus many states. Treat insurance shopping as part of your offer strategy, not an afterthought. Hail in North Texas, wind/hurricane on the Gulf Coast, and rising premiums statewide make insurance a first-class budget item. Percentage wind/hail deductibles are common.
Worked payment example
Using Texas's indicative median of $350,000, a 20% down payment of $70,000, a 6.75% rate, and local tax/insurance defaults, principal and interest is about $1,816 with a full monthly payment near $2,483 (including roughly $467 tax and $200 insurance). With only 5% down ($17,500), the same price point jumps to about $2,976 per month because the loan is larger and PMI is typically required — roughly $152 of that total.
A common comfort check is keeping total housing cost near 28% of gross income. At $2,483/month, that implies ballpark gross income around $106,403 per year before other debts. Run your real income and debts through our home affordability calculator rather than relying on this rule of thumb alone.
Adjust the calculator above, or open the home affordability calculator with your income and debts. Methodology details are on how we calculate.
Buyer programs to research in Texas
- Texas State Affordable Housing Corporation / TDHCA programs
- Local bond and DPA programs in major metros
- VA loans widely used near large military installations
Eligibility, funding, and income limits change. Confirm details with the program administrator or a participating lender before relying on assistance in your offer.
Practical tips for Texas buyers
- File for homestead exemption after closing - it materially affects escrow.
- Get insurance quotes before option periods expire, especially on the coast.
- Model MUD/PID taxes in suburban master-planned communities.
Figures on this page are educational estimates for Texas, not a lender quote. County tax assessors, insurance agents, and licensed mortgage professionals can confirm the numbers for a specific address. See our methodology page for the formulas and assumptions behind every estimate.