What Is The Cost Of Living In Denver Vs. Dallas?

When considering new places to call home, Denver and Dallas may be at the top of your list – and for good reason. Both cities have much to offer potential residents and are also among the fastest-growing cities in the country. On the one hand, life in Denver gives the best of both worlds: all of the amenities of a big city, with an outdoorsy, relaxed lifestyle due to the city’s breathtaking nature.

On the other hand, Dallas offers exceptional job growth, cultural diversity, a central location, and world-class educational opportunities. But, how do these two cities stack up when it comes to cost of living?

The overall cost of living index in Denver, Colorado is 127.8, meaning it is nearly 28% more expensive to live in Denver than the national average (100). Dallas, Texas, on the other hand, has a cost of living index of 101, so it is considerably more affordable than Denver and basically on par with the national average. Denver’s median home price is $534,100, which is a whopping 83% higher than the national average of $291,700. Meanwhile, the median home price in Dallas is just $259,800 – lower than the national average and 51.4% less than Denver.

Aside from median housing prices, let’s take a deeper look at how the cost of living compares in Denver vs. Dallas.

The cost of owning a home in Denver is substantially higher than the rest of the country. Whereas, housing prices in Dallas tend to be lower than the national average. The median cost of a home in Denver is a staggering $534,100, while Dallas’ median home price is only $259,800. With these numbers in mind, cheaper housing can be seen as a major advantage to living in Dallas over Denver.

Examining housing cost indexes can give you an even better idea of how home prices vary in Denver versus Dallas. Based on an overall US average of 100, Denver’s housing index is 184.3 and Dallas’ is 92.2. This means that housing in Dallas, Texas is about 49.5% cheaper than Denver, Colorado. Of course, prices will vary based on where and what neighborhood you live in in either city.

Like home prices, rental prices fluctuate based on a few different factors, including size, quality, and location. The average monthly rent for an apartment in Denver, Colorado is $1,824 and the average apartment size is 841 square feet. Though, the rent that you can expect to pay in Denver comes down to the neighborhood that you choose to live in.

For example, the most affordable neighborhoods in Denver in terms of rent are Barnum, Mar Lee, and Westwood, each of which have average monthly rental prices of $1,071. Whereas, LoDo is the most expensive neighborhood in the city, with an average rent of $2,285 per month.

With that said, take a look at the following table for a breakdown of the average monthly rents in some of Denver’s many neighborhoods:

On the other hand, the average monthly rent for an apartment in Dallas, Texas is $1,383 and the average apartment size is 848 square feet. This means that, on average, apartments are both cheaper and larger in Dallas than Denver. However, like Denver, rental prices vary in Dallas depending on which neighborhood you rent in.

For instance, Brighten Lofts North, Brighton Lofts South, and Grammercy Place are the most expensive neighborhoods in Dallas, each with an average monthly rent of $2,834. Whereas, Arbor Ridge is the most affordable neighborhood in the city, where average rent goes for about $777 per month.

The table below outlines a more comprehensive overview of the average monthly rent in some of the many neighborhoods across Dallas:

The state of Colorado has one of the lowest income tax rates in the country (among states that have an income tax). Colorado has a flat income tax system, meaning regardless of your income level, you pay a flat rate of 4.3%. This rate is considered to be in the middle of the pack among the eight other states with a flat income tax.

Texas, on the other hand, is one of the few states that does not collect a state income tax. Regardless of your income or occupation, you do not have to pay a state income tax on your earnings in the entire state of Texas. You do, however, still have to file your federal income tax return and pay your federal income taxes accordingly.

Although Colorado’s statewide sales tax of 2.9% is one of the lowest in the country, the actual sales tax is higher in most cities. Due to the additional city and county sales taxes, the total sales tax rate in Denver is 8.31%. The situation is similar in Dallas as well.

Texas has a statewide sales tax of 6.25%. However, with the extra county and city sales taxes, the total sales tax rate you pay in Dallas is 8.25%. This is the highest rate in Texas and is also the rate in most major cities in the state. Although sales taxes are slightly higher in Denver than Dallas, the lack of state income tax in Dallas makes for a more tax-friendly situation overall.

Denver’s average effective property tax rate is 0.50%, which is considerably lower than the national average of 1.07%. This means that Denver homeowners pay only 0.50% of their home’s assessed value in property taxes annually. The median annual property tax payment for Denver homeowners is just $1,771.

The state of Texas, however, has some of the highest property taxes in the nation. In Dallas County alone, the average effective property tax rate is a whopping 1.93%. This translates to thousands of dollars in annual property tax payments for the average Dallas homeowner.

Property taxes across Texas have been a problem between the local government and the state for many years. While some state representatives want to cap rates, cities and counties resist this measure because property taxes are the primary source of local revenue in many areas.

The median household income in Denver is $60,098, which is around 4.2% higher than the national median household income of $57,652. When compared to Dallas, however, Dallas residents make around 21% less than Denver residents – with Dallas’ median household income of $47,285. This means that, overall, there’s a good chance that you could make more money in Denver than Dallas.

Dallas also has a higher unemployment rate than Denver. The unemployment rate in Denver is 7.1% and the unemployment rate in Dallas is 7.4%. Both rates, however, are higher than the national average of 6.0%.

Since food and groceries are expenses that people encounter on a daily basis, the overall grocery and food index is another factor that influences cost of living in a particular location. If you live in Dallas instead of Denver, you’d be looking at about a 2.7% savings on food and groceries.

The overall grocery cost index in Denver is higher than the national average of 100, coming in at 101.9. Whereas, Dallas’ grocery index is slightly less than the national average, at 99.1. The following table provides a more detailed look at the average prices of groceries in Denver vs. Dallas.

Whether you choose to live in Denver or Dallas, 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, and other public transportation expenses.

Denver has one of the best public transportation systems in the nation and while Dallas doesn’t typically rank on any lists, the city has somewhat decent public transportation. With Denver’s transportation cost index of 116.1 and Dallas’ transportation cost index of 117.1, you’d enjoy a very marginal savings of 0.9% on transportation costs in Dallas.