Cheapest Places to Live in Texas: The 8 Most Affordable Cities

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Mike Romano

Aug 16, 2023

Mike Romano is a mortgage industry veteran with over 20 years of experience. His expertise spans mortgage technology, credit risk, and loan origination, and he has spoken at many mortgage and fintech conferences. He has a Bachelor's and MBA from the University of California, Berkeley and currently resides in Austin, TX. NMLS # 2515901

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    Whoever coined the phrase “everything is bigger in Texas” must’ve not been talking about the cost of living. The second most populous state in the US has a lot to offer, including a good number of affordable cities.

    If you’re considering a move to the Lone Star State, this list of the cheapest places to live in Texas is made for you.

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      Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.

      Methodology: How we ranked affordability in Texas 

      Our list of the eight cheapest places to live in Texas is based on the cost of living for a family of four and takes into account several important factors: median home price, average rent for a three-bedroom apartment, and the living wage for a family with two children and two adults, including one wage earner. 

      This sample family obviously doesn’t represent every household, but we are confident this list can be used as a starting point to guide households of all sizes. 

      We also limited our search to cities with populations over 100,000 to avoid listing areas that are incredibly affordable, but so remote or small that they may not offer the employment opportunities needed to make a living wage.

      The 8 cheapest places to live in Texas

      • Amarillo
      • El Paso
      • McAllen
      • Killeen
      • Tyler
      • San Antonio
      • Denton
      • Round Rock

      1. Amarillo

      Amarillo is located at the midpoint between Albuquerque and Oklahoma City, and it offers the lowest housing prices of any Texas city on our list. The overall cost of living is also very affordable. 

      Amarillo is relatively close to four other states, so there are a good deal of employment opportunities, especially in manufacturing, aviation and aerospace, and renewable energy.

      • Median home price*: $195,794 / 44% lower than US average
      • Average rent (3 bdrm home): $1,595 / 25% lower than US average
      • Living wage (family of 4): $35.93 / 28% lower than US average

      Can you afford to buy a home in Amarillo?

      Your monthly mortgage payment will be about $1,584* if you buy a home for $195,794, the median price in Amarillo. Based on the living wage in the area for a family of four ($35.93/hr or $6,277/month) your mortgage payment would be a comfortable 25% of your total income. 

      *Throughout this article, when we list monthly mortgage payments, we base our figures on a 30-year mortgage with a 20% down payment and an interest rate of 7.25%. We also include monthly property tax and homeowner’s insurance payments, based on average costs for the area. 

      2. El Paso

      El Paso doesn’t get as much attention as some of the bigger cities in Texas, but it’s the 24th largest metropolitan area in the United States. The housing, rent, and cost of living for a family of four are all notably below the national average. 

      El Paso borders Mexico and New Mexico, so there are more employment opportunities in the city than you might expect. The top industries in the area are government, healthcare, and retail. 

      • Median home price: $211,055 / 39% lower than US average
      • Average rent (3 bdrm home): $1,685 / 21% lower than US average
      • Living wage (family of 4): 35.45/hr / 29% lower than US average

      Can you afford to buy a home in El Paso?

      If you buy a home at the median price of $211,055, your monthly mortgage payment will be around $1,694. Based on the living wage for a family of four ($35.45/hr or $6,144/month) your monthly mortgage payment would be just under 28% of your income. 

      Housing costs at or below 28% of your income are generally considered comfortably affordable by most personal finance experts.  

      3. McAllen

      McAllen is a major transportation and logistics hub in southern Texas, thanks to its proximity to the Mexican border and the Gulf of Mexico. 

      McAllen frequently gets ranked as one of the best places to live in Hidalgo County, likely due to how affordable it is, the local university, and the ample employment opportunities offered by the city’s transportation and logistics industry.

      • Median home price: $213,206 / 39% lower than US average
      • Average rent (3 bdrm home): $1,700 / 19% lower than US average
      • Living wage (family of 4): $35.30 / 29% lower than US average 

      Can you afford to buy a home in McAllen?

      If you buy an average-priced home in McAllen for $213,206, your monthly mortgage payment will be about $1,709. A family of four earning the living wage in the area brings in around $6,188 per month, meaning your housing costs would make up 28% of your total income. 

      4. Killeen

      Killeen is just north of Austin, near Belton Lake and Stillhouse Hollow Lake. The location is excellent and Killeen is one of the most affordable places to live in Texas. Schools in the area consistently rank better than average, and even though the city has a suburban feel, it has many of the amenities you’d find in a larger metro location.

      The top industries in the area are government, education, and construction.

      • Median home price: $227,975 / 35% lower than US average
      • Average rent (3 bdrm home): $1,350 / 36% lower than US average
      • Living wage (family of 4): $35.28 / 29% lower than US average

      Can you afford to buy a home in Killeen?

      Based on the average home price, buying in Killen costs around $1,816 in monthly mortgage payments. This represents 30% of the income for a family of four making the living wage in the area. 

      5. Tyler

      The city of Tyler, TX is relatively close to Dallas, though not quite close enough for a comfortable commute. Day trips into the city are totally doable, though. Most of the town is laid out like a suburb, which gives it a quiet atmosphere. 

      There’s a university in town, and there are many employment opportunities, thanks to the location. The top industries in the area are agriculture, healthcare, and energy. 

      • Median home price: $254,882 / 27% lower than US average
      • Average rent (3 bdrm home): $1,750 / 17% lower than US average
      • Living wage (family of 4): $36.82 / 26% lower than US average 

      Can you afford to buy a home in Tyler?

      Buying can be a bit more expensive in Tyler, as the mortgage on an average home is around $2,010 per month. If you make the area’s living wage of $36.82/hr ($6,382/month) your housing costs would be 31.5% of your total income. This is more of a stretch, but still within what most lenders look for on a mortgage application, and could still be doable depending on your other debts and expenses. 

      Making a larger down payment is one way to reduce your monthly mortgage costs. Many first-time home buyers in Texas qualify for down payment assistance to help with this.  

      6. San Antonio

      Although San Antonio is one of the major cities in Texas, it’s still one of the cheapest places to live in the state. Housing, rent, and the cost of living are all below the national average, which is impressive for a major metro area. If you need or want to live in a larger city, San Antonio is a great option. 

      • Median home price: $265,322 / 24% lower than US average
      • Average rent (3 bdrm home): $1,799  / 14% lower than US average
      • Living wage (family of 4): $37.65 / 25% lower than US average 

      Can you afford to buy a home in San Antonio? 

      Buying in San Antonio is more expensive than many of the other Texas cities on our list. The mortgage on a median-priced home would cost you about $2,086. This represents around 32% of the total monthly income for a family of four earning the living wage for the area. 

      7. Denton

      Denton is on the north edge of Dallas and could be considered a suburban Dallas neighborhood. However, Denton is a complete city with a university, many employers, and plenty of outdoor recreation, thanks to nearby Lake Ray Roberts. 

      There are a good number of employment opportunities in town, and the commute into Dallas is reasonable. Top industries in Denton include manufacturing, education, transportation, and logistics. Housing prices in Denton run slightly above the national average, but not by much. 

      • Median home price: $364,086 / 4.4% higher than US average
      • Average rent (3 bdrm home): $2,159  / 2.8% higher than US average
      • Living wage (family of 4): $39.31 / 22% lower than US average 

      Can you afford to buy a home in Denton?

      The mortgage on a median-priced home in Denton costs around $2,798 per month. A family of four earning the area’s living wage brings in around $6,813 per month. At this income, your housing costs would be 41% of your total income. 

      Down payment assistance (DPA) can help bring home ownership within reach. Stairs Financial streamlines your access to DPA, making it easy for you to connect with a trusted lender and compare the loan and assistance programs you may qualify for, all in one place.

      Learn more about your options.

      8. Round Rock

      Round Rock is one of our picks for the best places to live in Texas with a family. It is a suburb of Austin, with great local schools and a short commute into the city. Round Rock has several parks and easy access to outdoor recreation. 

      Round Rock might not be the cheapest place to live in Texas, but the location and suburban feel make the prices seem reasonable considering the amenities.

      • Median home price: $460,701 / 32% higher than US average
      • Average rent (3 bdrm home): $2,244  / 7% higher than US average
      • Living wage (family of 4): $39.67 / 21% lower than US average 

      Can you afford to buy a home in Round Rock? 

      The mortgage for a median-priced home in Round Rock costs around $3,495 per month, which is considerably more than the average cost of rent in the area. A family of four making the living wage for Round Rock would have to spend half of their income on a mortgage. 

      The bottom line: Is Texas an affordable place to live?

      Yes, Texas is an affordable place to live. According to the composite cost of living index, Texas is the 16th most affordable state in the US. This means that on average, almost everything, including food, utilities, and housing is less expensive in Texas than in most other states.

      It’s true that Texas has higher property taxes than some states. However, Texas has no income tax, and the state has extensive employment opportunities in every business sector, from automotive manufacturing to computers and technology.

      The combination of potential earning opportunities and low cost of living definitely make Texas an affordable place to live.

      Buying a home in Texas? Down payment assistance can help

      Even in a relatively affordable housing market like Texas, a down payment can be a serious obstacle, especially for first time home buyers. And a down payment isn’t just about lowering your initial costs.

      Making a larger down payment lowers your loan amount and can also reduce your interest rate, which saves you thousands in the long run.

      Down payment assistance (DPA) can give you access to thousands or even tens of thousands of dollars to make a larger down payment. Unfortunately, it’s usually challenging to find out about DPA programs because up until now, there’s been no single place to find and compare information.

      Stairs Financial fixes this problem. 

      Stairs connects you to qualified lenders who work with all the down payment assistance programs you might qualify for, then lets you compare your options side-by-side.

      With Stairs Financial, you can easily find out exactly which down payment assistance programs are available to you, so you can make a more informed decision.

      Learn more.

      Find up to $15,000 towards a home 🏠

      Compare local down payment assistance and find a mortgage, fast.

      Where do you want to buy?
        Search by ZIP code, address, city, county, or neighborhood
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