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

Cost of living is a common factor used to determine how expensive it is to live in one place versus another. As such, it is typically used by those trying to decide where they want to move. So, if you’re planning on relocating and can’t decide whether Nevada or Texas is right for you, cost of living is an important consideration. While both states have much to offer potential residents in terms of activities, sunshine, and culture, how do they stack up when it comes to cost of living?

The cost of living index in Nevada is 110.5, meaning it is nearly 11% more expensive to live in Nevada than the national average (100). Texas, on the other hand, has a cost of living index of 93.9, so it is more expensive than both Nevada and the national average. The median price of a home in Nevada is $358,400, which is about 23% higher than the national average of $291,700. Meanwhile, the median home price in Texas is $243,600 – about 32% lower than Nevada.

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

When you consider the fact that the median home price in Nevada is around $358,000, it is more expensive to buy a home here than in Texas. With Texas’ median home price of around $243,600, you’re looking at spending almost 50% more for a home in Nevada.

Over the last couple of years, Nevada’s housing market has tightened and the home prices are continuing to rise. This has caused individuals with deeper pockets to only pay cash for homes, but, in some cases, submit a bid that is well above the home’s original asking price. With such a limited inventory, this has also contributed to the steeper competition. Overall, the situation in Nevada spells bad news for entry-level homebuyers.

This struggle to secure a home that’s occurring in Nevada is similar to what is going on in Texas, and much of the U.S. In the last year, Texas home prices have increased by 8.5 percent, as a result of limited inventory and high demand. Like Nevada, homes in Texas are selling for above the asking price and receiving multiple offers as well.

Although it may be a great time to be a seller in both Nevada and Texas, the current circumstances are not as ideal for buyers. Regardless, it still remains more affordable to purchase a home in Texas than Nevada.

When you compare the home prices in Nevada vs. Texas, it’s important to note that the majority of Nevada’s population is in two cities: Reno and Las Vegas. Nevada state’s total population is around three million people, meaning about two million reside in Las Vegas and 500,000 residents live in Reno. The remaining 500,000 is spread out across the numerous small towns in Nevada.

Although the median home price in Nevada is higher than Texas, both states have cities with prices over the national average. As buyers compete, homes are going to keep getting more and more expensive in both Nevada and Texas. While both states are experiencing quite a bit of competitive, higher-than-normal asking prices, and a supply and demand imbalance, housing costs are still around 30 to 35 percent cheaper in Texas than Nevada.

With a statewide average monthly rent of $1,107, Nevada can be considered one of the more affordable states to live for renters. However, the actual rental price you pay will depend on the city you live-in in Nevada. As the state continues to grow, some areas are seeing a steady rise in rental rates.

With a median rent of $2,144 per month, the area with the most expensive rent in Nevada is a small section of North Las Vegas. Whereas, the most affordable rent in the state is in Schurz, Nevada, located just outside of Reno, with a median rent of just $324 a month.

That said, refer to the following table for the average monthly rent in some of the various cities across the state of Nevada:

Between 2019 and 2020, average monthly rent declined in 12 states, with Texas being one of them. At $1,045 per month statewide, average rental prices in Texas cities are generally below the national average. Though, like Nevada, rents vary across the state of Texas depending on where you live. For example, the area with the most expensive rates in Texas is Flower Mound, at $1,685 per month. Meanwhile, the city of Brownsville is the cheapest location for renters in Texas, at just $730 per month. Regardless, rents are still more affordable overall in Texas than Nevada.

The table below provides a more comprehensive look at the average rent you can expect in some of Texas’ major cities:

Fortunately, one of the main financial benefits of living in either Nevada or Texas is the lack of state income tax. Residents in both states enjoy one of the most tax-friendly situations in the country. They are among a short list of states in the nation that have no personal income tax. This means that whether you’re a real estate mogul, teacher, doctor, or dog-walker, you do not have to file a state income tax return and do not have to pay taxes on your earnings in either Nevada or Texas.

You do, however, still need to file a federal income tax return and pay federal income taxes – but nothing is required of you at the state level.

With a statewide rate of 6.85%, Nevada has the seventh-highest base sales tax in the country. However, like most states, cities, and counties in the state charge an additional sales tax. When you take all of the extra local sales tax rates into account, you could pay as much as 8.375% depending on the location in Nevada. For instance, Clark County’s sales tax is 8.35% due to the additional 1.525% county sales tax rate.

Texas also levies a sales tax. The statewide sales tax rate is lower than Nevada – at just 6.25%. Though, when you consider all the extra city and county taxes, 8.25% is the highest sales tax rate that you could be subjected to in Texas. Sales tax rates in most of Texas’ major cities – like Houston, Dallas, and San Antonio – do collect an 8.25% sales tax.

Property taxes in Nevada vary based on the home’s assessed value, and local tax rates. Nevada’s average effective rate is 0.53%, meaning the average Nevada homeowner pays annual property taxes equal to 0.53% of their home’s market value. Though, your actual rate will vary based on the county you live in, with Nevada’s average county rates ranging from 0.44% to as much as 1.04%. With this range in mind, the median among of property taxes paid in Nevada is $1,695.

Texas, on the other hand, has some of the highest property taxes in the country. The state’s average effective property tax rate is a staggering 1.69%, meaning Texas homeowners pay 1.69% percent of their home’s assessed value in property taxes each year. This equals a statewide average of $3,390 in annual property tax payments for Texans. Texas property taxes have been a longstanding issue between the local governments and the state.

Whether you live in Nevada or Texas, transportation costs are another factor that impacts overall cost of living. These expenses include things like vehicle purchase prices, gas prices, bus fares, transit passes, and other public transportation costs. The transportation costs in Nevada are approximately 17% higher than the national average.

Nevada’s transportation cost index is 116.7 and Texas’ transportation cost index is 103.3. Although both states have indexes that are above the national average of 100, these expenses, overall, are more affordable in Texas than Nevada.