What Is The Cost of Living In Dallas Vs. Houston?

Dallas and Houston are about as well-known as any of the major Texas cities. They are infamous for each being a huge metropolis, but Dallas is often associated with classic country vibes while Houston is considered a more diverse, multicultural hub. They each have a desirable appeal depending on your goal lifestyle. Both beloved Texas towns are extremely affordable, but how do they stack up across various metrics?

The cost of living index in Dallas is 101.6, meaning it’s around 1.6% more expensive to live in Dallas than the national average (100). Houston has a cost of living index of 96.5, so it’s actually less expensive than Dallas and the national average. The median price of a home in Dallas is $214,700 which is slightly less than the U.S. overall. The median home price in Houston is $185,000.

Right off the bat, you know either location will be good for your bank account. But what else goes into the cost of living in Dallas vs. Houston?

Homeownership in both Dallas and Houston is a huge bargain. Their median home prices are a quarter of what it will cost you in pricey locations like California or New York City. Though Houston is less expensive to buy a home in, Dallas is still very affordable. Neither has a median home price that will make you squirm.

Both real estate markets are essentially begging you to take advantage of bargain deals. This is still true even in light of 58% home appreciation in Dallas over the last decade and 48.7% home appreciation in Houston over the same time period.

Examining housing cost indexes can give you a better picture of how home prices differ in Houston versus Austin. Based on an overall US average of 100, Dallas’ housing index is 92.2 and Houston’s is just 80.2. This means that Houston is about 13% cheaper than Dallas.

Of course, prices can vary based on your specific location in either city. The closer you are to the city center in Dallas or Houston, the higher the prices will be. So, consider moving further away from the downtown area to save money in either city.

Like home prices, rental prices vary depending on a number of factors, like size, location, and quality. The average rent for an apartment in Dallas, Texas is $1,383 per month and the average apartment size is 848 square feet. About 50.7% of households in Dallas are occupied by renters, with the rest being homeowners.

Though, rental prices in Dallas vary depending on the neighborhood you live in. For example, the most expensive neighborhoods in Dallas are Brighten Lofts North, Brighton Lofts South, and Grammercy Place, each with an average rent of $2,834 per month. Whereas, Arbor Ridge is the most affordable neighborhood in the city, where average rent goes for only $777 per month.

The following table outlines a more comprehensive look at the average monthly rent in some of the many Dallas neighborhoods:

On the other hand, the average rent for an apartment in Houston is $1,205 per month and the average apartment size is 880 square feet. About 48.2% of households in Houston are occupied by renters, with the rest being homeowners. Though, the rent you will pay in the city ultimately comes down to the neighborhood that you settle in.

For instance, South Park is the most affordable neighborhood in Houston, with an average rent of $625 per month. Whereas, the most expensive neighborhood is Fourth Ward, where the average monthly rent is $1,982.

With that said, examine the following table for a detailed breakdown on the average monthly rent in some of Houston’s many neighborhoods:

Whether you choose to move to Dallas or Houston, you must also consider transportation costs in order to accurately calculate the overall cost of living in both cities. These costs include expenses like gas prices, vehicle purchase costs, bus fares, monthly transit fees, annual car insurance premiums, and other public transportation expenses. Although both cities have higher transportation costs than the rest of the country, with Houston’s transportation cost index of 119 and Houston’s transportation cost index of 117.1, you’d enjoy a very marginal savings of 1.6% on transportation costs in Houston.

Texas is a state of cars. It’s not like New York City or Chicago, where walking or taking the metro is the norm and very few people in the big city are willing to pay to drive. But Dallas and Houston are both massive enough to support some walkability and metro infrastructure.

The average commute time in Dallas one-way is about 27 minutes. Around 76% of Dallas residents drive a car to get around and only about 4% utilize mass transit like bus systems. Similarly, the average commute time in Houston one-way is about 27 minutes. Around 77% of Houston residents take a car on their own wherever they go and only 3.9% are willing to take buses or the metro to get from point A to point B.

Dallas happens to have the DART (Dallas Mass Transit Rail), the M-Line Trolly, and the TRE Commuter Rail. Houston has similar options for how to get around, such as the METRORail system, the bus system, and more. Both Dallas and Houston have highways that will make your jaw drop. They are going to get you where you want to go fast, so long as traffic doesn’t stand in your way.

You have to consider the cost of car insurance as well when you tally up the costs of living in these Texas cities. This is perhaps the only area besides sales tax where Texas gets a bad rating compared to the rest of the U.S. Cars cost a lot and their value depreciates rapidly as soon as they are purchased. This is a great excuse to only purchase used vehicles.

The average annual cost of full coverage car insurance in Texas is $1,823 per year. Though, car insurance premiums are much higher in both Dallas and Houston, outlined below.

The average household income in Houston is $49,399. The unemployment rate in Houston is 3.90%, which is about 0.2% higher than the United States. The average household income in Dallas is $47,285. The unemployment rate in Dallas is 3.50%, which is about 0.2% lower than the United States. Looking at these figures, it may make more sense to move to Dallas, since they have lower unemployment. On the other hand, the average household income isn’t as large as Houston.

The average salary in Houston is $72,000, while the average salary in Dallas is $71,000. The minimum wage in Texas is $7.25. The state policies on minimum wage make this an undesirable location for low-income workers, despite it being such an affordable state.

Dallas and Houston are neck and neck when you calculate how much it costs to live in these cities. Overall, Dallas may be more expensive for homeownership, but that’s seriously dependent on the neighborhood you choose to live in. Both cities experience wide fluctuations in median home cost depending on the neighborhood you select.

With so many tax benefits, either Dallas or Houston would be an excellent choice for the cost-conscious American. You’ll get tons of value for your home and your usual living expenses. Consider moving to these famous Texas cities if you’re a budget-conscious type of person.