It is no longer news that buying a house no matter what state you live in requires serious financial and time commitment. And, out of all the places in the country, Texas seems to attract plenty of prospective home buyers. However, is buying a house in Texas worth the stress and monetary commitment?
Texas has one of the lowest mortgage monthly payments at $1,443—even lower than the national average of $1,500. Also, with lower interest rates and several areas in Texas experiencing a steady rise in the price of homes and rent, buying a home in Texas may be worth the risk in the long run.
But buying a home in Texas goes beyond the price; to determine whether it’s worth the move, you need to factor in the cost of mortgage, taxes, and the average cost of rent when compared to buying.
Are Homes in Texas Cheap?
While homes in Texas may not seem cheap to the average home buyer, when compared to other parts of the country with similar demography, it is quite affordable. A recent study by Mashvisor revealed that the median property price in Texas is $323,619, which is lower than the US median home price of $325,200.
When compared to states like California and Los Angeles with median home prices in the region of $675,642 and $533,500, respectively, it is safe to say that the cost of homes in Texas is relatively cheap.
Also, Texas homes have one of the lowest costs per square foot in the country when compared to close to 25 states in the US. A report by GOBankingRates revealed that a budget of $300,000 should be able to get you 2,616 square feet house at a median price of $115 per square foot.
Why Are Home Affordable in Texas?
Even with the state of Texas having the 3rd highest property tax rate in the US at 1.83%, the cost of housing is quite affordable when compared to other big states and cities. Below are some of the reasons why homes are relatively inexpensive in Texas:
- The state of Texas has a vast supply of build-able lands and less building regulations or permits. This makes it easy for construction to respond to the growing demand for housing at a lower price swing than other states of similar demography.
- A low median income pushes the price of homes down in some areas in Texas. As of 2019, the median family income in Texas is around $71,868, lower than the national average. Low income plays a role in driving down the cost of homes in the Texas real estate market.
- Labor costs are low. The Lone Star State is home to all sorts of businesses, but to support an even larger number of workers, wages are more economical, and the cost of living becomes lower; this results in lower prices of homes.
Should I Rent or Buy in Texas?
The age-long question on whether to buy or rent is one question you must answer when moving to Texas. While there is no right answer to this question, your decision should be based on your finances, housing needs, and living timeline in the state.
With the average rent in Texas at around $1,550, when compared to the median price of homes, which is $323,619, you should opt for the housing option that suits you and your family needs.
If you’re considering buying a home, Texas has some of the cheapest closing costs in the US, making it more affordable to close on a home. With an average closing cost of $3,938, which is even lower than the national average of $4,876, it is less expensive to close on a home in Texas than in states like New York, Delaware, and Washington.
In terms of renting, recent data from HomeSnacks shows that the average rent in Texas for April was $1,550, with an average price per square foot of $0.962. In comparison to several states and the national average of $1,650, the cost of rent in Texas is lower. But with a 3.3% rise in rent prices year-to-year, renters are more likely in for a continuous increase.
More importantly, with mortgage and down payment assistance programs available like the Texas State Affordable Housing Corporation, you can easily benefit from grants and second liens if you meet their requirements. Just remember that rent and home prices may be higher, depending on the location and square feet.
Buying a home in Texas may be a worthy investment if it suits your finances, housing needs, and family. Before you decide on purchasing a home, however, you should take into consideration the various fees associated with owning one. Most importantly, you should find out if you qualify for a mortgage or loan that works for you and supports your housing needs.