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

It seems as though living in Oregon is high on almost everyone’s list nowadays, and for good reason. In fact, Bend, Oregon is the second fastest growing city in the country. The state is known for its breathtaking scenery, numerous recreational opportunities, excellent breweries, and, overall, a very laidback lifestyle.

Though, Texas has a longstanding reputation as one of the most popular destinations for those looking to move to a new state. With its lack of state income tax, central location, ample job opportunities, and cultural diversity, there is much to love about Texas a well. But, when you compare Oregon and Texas, how do these two states stack up in terms of cost of living?

The cost of living index in Oregon is 113.1, meaning it is about 13% more expensive to live in Oregon than the national average (100). Texas, on the other hand, has a cost of living index of 93.9, so the state is more affordable to live in than both Oregon and the national average. The median price of a home in Oregon is $438,100, which is about 50% higher than the national average of $291,700. Meanwhile, the median home price in Texas is $243,600 – under the national average and about 44% cheaper than Oregon.

Aside from median housing prices, let’s examine how the cost of living compares in Oregon vs. Texas.

When you evaluate the fact that the median home price in Oregon is nearly $440,000, it is considerably more expensive to purchase a home here than in Texas. With Texas’ median home price of close to $244,000, you’d pay about 80% more for a home in Oregon.

In the last couple years, we’ve seen record-low interest rates on home loans, a housing shortage, and increase demand among buyers. This has caused a record increase in home prices all across the nation, but especially in Oregon. Additionally, the reluctance of potential sellers to put their home up for sale in the middle of a pandemic has greatly contributed to the low housing supply. For the few homes that are available, both Oregon and Texas are suffering from competitive bidding.

In Texas, home prices have gone up over 8.5 percent in the past year because of the limited inventory. The country is experiencing a classic case of supply and demand imbalance. In fact, many homes are even selling far above the asking price. While it may be an excellent time to sell in both Oregon and Texas, it is highly competitive and prices are not ideal.

Regardless, even with the increased demand and higher prices, it is still considerably cheaper to purchase a home in Texas than Oregon.

Oregon has been one of the fastest-growing states in the country for many years, driven by transplants that head here from other states. Though, in the last few years, the state has started to see slower growth overall. The slower population growth may help to relieve some upward pressure, with Oregon’s land use and tenant laws restraining the housing supply and sluggish residential construction causing housing prices to increase.

Based on the table above, it’s clear that lower housing costs are a major advantage to living in Texas over Oregon. However, the prices depend on the city you live-in in either state. For example, while most Texas cities have prices below the national average, the median home price in Austin is above. Although there may be cities in both Oregon and Texas that have home prices that are more expensive than other U.S. states, housing costs remain between 75 and 80 percent higher in Oregon.

The average monthly rent in most Oregon cities is generally lower than the national average. Though, Oregon takes the fifteenth slot on the list of states with the highest average rental prices in the U.S. The state’s national average rent is $1,110 per month, but rates vary significantly based on where you settle in Oregon. For example, apartments in Oswego, OR are the most expensive, renting for around $1,689 a month. Whereas, apartments in Keizer, OR are the most affordable, at just $1,059 on average.

With that said, the following table outlines the average monthly rent in some of the various cities in the state of Oregon:

Between the years 2019 and 2020, average monthly rental prices declined in 12 U.S. states, with Texas being one of them. At $1,045, average rental rates in Texas cities are typically below the national average, like Oregon. Though, also similarly to Oregon, the actual rent varies based on where you live in Texas. For example, Flower Mound, Texas boasts the most expensive rental prices in the state at $1,685, while the city of Brownsville is the most affordable place for renters in Texas, at just $730 per month.

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

Oregon became one of the first states on the western side of the U.S. to levy a state income tax. It has a progressive income tax system, with four income tax brackets in total that range from 4.85% to 9.9%. The state’s top marginal rate, 9.9%, is one of the highest in the country. Though, this rate only applies to single filers that make at least $125,000 or joint filers that make $250,000 of taxable income in Oregon.

Texas is also one of the select few states in the nation that does not collect a state income tax of any kind. This means that whether you’re an attorney, dentist, real estate tycoon, or nanny, you do not have pay a state income tax on your earnings in Texas. You do, however, still have to file a federal income tax return and pay your federal income taxes annually.

One of the major financial benefits of moving to Oregon is the lack of sales tax. The state does not collect any sort of sales tax – neither at the state nor the local level.

Texas, on the other hand, has a fairly modest statewide sales tax rate – at just 6.25%. Though, when you factor in all the extra city and county taxes across the state, 8.25% is the highest sales tax rate that you could pay in Texas. In fact, sales tax rates in the majority of Texas’ major cities – like Houston, Dallas, and San Antonio – do hit this limit.

There are 1,200 local taxing districts in the state of Oregon, each of which having distinct property tax rates. Oregon’s tax collections are primarily managed by the state’s 36 counties, which assess property and conclude the taxes owed. The average effective property tax rate in Oregon is 0.90%, which is the 25th-highest in the nation. However, property tax rates vary quite a bit between counties. For example, Josephine County has the lowest rate at just 0.58% and Morrow County’s is the highest, at 1.24%.

Similarly, property taxes in Texas are among the highest in the country. The average effective property tax rate is an astonishing 1.69%, which means Texans pay 1.69% percent of their home’s market value in taxes every year. This translates to a statewide average of $3,390 in annual property taxes for homeowners in Texas.

Another area where we see cost savings in Texas in terms of cost of living is transportation. Transportation costs include expenses like gas prices, public transportation costs, and new vehicle purchase prices. The transportation cost index in Oregon is 107.1, which is slightly higher than Texas’ transportation cost index of 103.3. Although both states have indexes greater than the national average, based on the table below, you can expect cheaper public transportation and lower gas prices in Texas.