What Is The Cost Of Living In Montana Vs. Texas?

Jessica Stone
by Jessica Stone

Cost of living is a factor that is used to determine how expensive it is to live in one location versus another. As such, it is commonly used by those who are looking to decide where they want to settle down. With Montana’s stunning landscapes, low population density, negligible traffic, abundant unspoiled land, and numerous outdoor recreational activities, there is much to love about Montana.

Texas, however, offers much of the same, with the added benefit of plenty of job opportunities, both urban and rural living, cultural diversity, and a reasonable cost of living. But, how do these two states stack up in terms of cost of living?

The cost of living index in Montana is 94, meaning it is about 6% more affordable to live in Montana than the national average (100). Texas, on the other hand, has a cost of living index of 93.9, so it is less expensive than the national average and relatively on par with Montana. The median price of a home in Montana is $353,700, which is about 21% higher than the national average of $291,700. Meanwhile, the median home price in Texas is $243,600 – under the national average and about 31% cheaper than Montana.

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

Do You Need to Hire Movers?

Get free, zero-commitment quotes from pro contractors near you.

Housing Market in Montana vs. Texas

When you evaluate the fact that the median home price in Montana is $353,700, it is actually more cost-effective to purchase a home in Texas. With Texas’ median home price of $243,600, you’d end up paying around 45% more on a home in Montana.

Like most of the United States, the housing market in Montana skyrocketed as a result of the COVID-19 outbreak in 2020. While the housing shortage started in Montana a couple of years ago, it was exacerbated by the pandemic. Now, in 2021, with so many people moving to Montana and returning to the state from elsewhere, there are tons of buyers but not enough homes. It is a classic case of supply and demand imbalance.

As a result, median home prices have increased this year and in addition to more buyers than homes, the multiple offers on a property are also contributing further to the increase in prices. A similar situation is also happening in Texas, as home values have climbed about 8.5 percent over the last year. The limited inventory is a major contributor, and there are actually fewer homes for sale in the state of Texas than at any point over the last twenty years.

Like Montana, homes put up for sale in Texas are receiving several offers and many are selling for way above the asking price. While it may be a good time to be a seller in both Montana and Texas, the competition and higher prices are not ideal for buyers. Regardless, even with the increased prices, homes still remain cheaper in Texas than Montana.

Home Prices in Montana vs. Texas Comparison

Median home prices ultimately come down to the specific city and county that you live in in a particular state, and this is true for Montana and Texas. The table below highlights some of the major cities in Montana and Texas, along with their associated median home prices:

City Median Home Price
Billings, MT$285,600
Missoula, MT$459,400
Great Falls, MT$232,100
Houston, TX$220,000
Austin, TX$551,200
Dallas, TX$259,800

While, overall, cheaper housing costs are an advantage to living in Texas over Montana, prices vary quite a bit across both states. For example, the median housing price in Missoula, Montana is over $450,000 and Austin, Texas’ median home prices are over $550,000. Whereas, if you choose to live in cities like Great Falls, MT, Billings, MT, and even Dallas, and Houston, the median home prices are lower than the national average.

Although there are cities in Texas that have higher median home prices than other states in the U.S., they are still around 30 percent cheaper than Montana.

Rent Prices in Montana vs. Texas

In the U.S., there are about twenty-one states with average monthly rental prices below $1,000. With a statewide average rent of $678 per month, Montana has the second-lowest average rental prices in the country. In fact, Montana, Oklahoma, and West Virginia are the only three states with rents under $700 a month. Generally speaking, states with the lowest rent also typically have some of the lowest overall costs of living, and this holds true for Montana.

With that said, refer to the following table for the average monthly rent in some of the various cities across the state of Montana:

City Average Rent
Billings, MT$1,012
Missoula, MT$1,035
Great Falls, MT$982
Bozeman, MT$1,250
Butte, MT$789

From 2019 to 2020, average monthly rent decreased in 12 states across the country, with Texas being one of them. With an average statewide rental price of $1,045, rates in Texas cities are generally below the national average. Though, like Montana, rental prices vary based on where you live in Texas. For instance, rent in Flower Mound is the most expensive in Texas at $1,685, while the city of Brownsville has the cheapest rents in the state, at $730 per month.

The table below displays a more comprehensive look at the average rent in some of the major cities across Texas:

City Average Rent
Houston, TX$1,205
Austin, TX$1,619
Dallas, TX$1,383
San Antonio, TX$1,151
Fort Worth, TX$1,273
Irving, TX$1,303

Taxes in Montana vs. Texas

There are some noteworthy differences between the taxes in Montana versus the taxes in Texas, described in detail below.

State Income Tax

Montana, like the federal income tax system, has a progressive state income tax. This means that you pay based on your income, with higher rates for higher earners and lower rates for lower earners. The state has seven income brackets and the rates range from as little as 1% to a top marginal rate of 6.9% for those who make over $18,400 in taxable income.

Texas, on the other hand, is one of the few states in the country that does not any sort of state income tax. So, whether you’re a physician, real estate agent, nanny, or lawyer, you are not required to pay any sort of income tax on your earnings in the state of Texas. However, you do still have to file a federal income tax return and pay your federal income taxes.

Sales Tax

Residents of Montana enjoy the benefit of no sales tax. This means that the state doesn’t collect any sort of sales tax, not at the state nor the local level. While goods and services can be bought sales-tax free, but “sin” taxes do apply on cigarettes and alcohol. Regardless, the lack of sales tax is a substantial financial benefit of living in Montana over Texas.

At just 6.25%, Texas has a somewhat modest statewide sales tax rate. When you factor in city and county taxes, the highest sales tax rate you could pay in Texas is 8.25%. Though, rates in most Texas major cities, such as Dallas, San Antonio, and Houston, do have the highest sales tax possible.

Property Tax

Another financial benefit of living in Montana is the fact that the property tax rates are lower than the national average. The average property tax collections in the state are relatively low, with an average effective rate of just 0.83%. In fact, this is the 24th-lowest property tax rate in the country.

Dissimilarly, the property taxes in Texas are some of the highest in the U.S. The average effective property tax rate is 1.69%, which means Texans pay an average of $3,390 in property taxes ever year. Texas property taxes have been a longstanding problem between the state and local government. Some representatives seek to limit rates, while cities and counties contest this because, in some areas, property taxes are the primary source of local income.

Taxes in Montana vs. Texas Comparison

StateIncome TaxSales TaxProperty Tax
Montana1% – 6.9%None0.83% (average effective rate)
TexasNone6.25% – 8.25%1.69% (average effective rate)

Transportation Costs in Montana vs. Texas

Whether you decide to live in Montana or Texas, you must consider transportation costs in order to figure out the overall cost of living in either state. These costs include expenses like gas prices, new vehicle purchase prices, monthly transit passes, bus fares, and additional public transportation fees. Montana’s transportation costs are about 25% lower than the national average, likely due to the low gas prices and public transportation costs.

However, with Montana’s transportation cost index of 75.2 and Texas’ transportation cost index of 103.3, these expenses are actually more expensive in Texas overall.

Cost FactorMontanaTexas
Gallon of gas$2.56$2.15
Monthly public transit pass$27.67$45.92
Taxi trip in downtown (approx. five miles)$17.50$14.26
New Volkswagen Golf$23,243$22,016

Income & Economy in Montana vs. Texas

The median household income in Montana is $50,801, which is about around 12% lower than the national median income of $57,652. When compared to Texas, however, Texas residents earn only about 12% more than Montana residents – with a Texas’ median household income of 57,051.

However, the two states have very different unemployment rates. Texas’ unemployment rate of 7.2% is quite a bit higher than Montana’s unemployment rate of 4.4%.

Do You Need to Hire Movers?

Get free, zero-commitment quotes from pro contractors near you.

Entertainment & Miscellaneous Costs in Montana vs. Texas

Cost FactorAverage Price in MontanaAverage Price in Texas
Monthly local gym membership$53.32$33.11
Movie ticket$11.29$10.01
Pack of cigarettes$7.20$6.85
Domestic beer (1 pint)$3.79$3.77
Cappuccino (mid-range area)$3.99$4.15
Pair of running shoes$77.28$70.86
Fast food combo meal$7.54$7.25

Related Guides

Jessica Stone
Jessica Stone

Jessica considers herself a home improvement and design enthusiast. She grew up surrounded by constant home improvement projects and owes most of what she knows to helping her dad renovate her childhood home. Being a Los Angeles resident, Jessica spends a lot of her time looking for her next DIY project and sharing her love for home design.

More by Jessica Stone