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The 5 Best Places to Live in Texas
By Paul Reynolds MONEY RESEARCH COLLECTIVE
No one needs to tell Texans that there are plenty of great places to live in their state. The challenge comes in affording those choice locations — and in affording their housing, especially.
The most popular Texas communities have experienced sharp rises in home prices and rents — and, needless to say, without corresponding hikes in incomes.
In Fort Worth, San Antonio and Dallas, home prices jumped by an average of 21% in 2021, according to the Dallas Federal Reserve Bank. In Austin, the rise was a full 30%. Those housing markets may now be softening, with prices moderating. Yet mortgage rates are on the rise, meaning overall affordability may not improve.
It isn’t only housing that’s becoming more financially trying. The Lone Star State has been stretched thinner than most by the steady rise in costs of living during the pandemic. A 2022 analysis by small-business site Merchant Maverick found that Texas was the sixth-most-affected state by inflation — with the impacts across the board, including in housing. The Joint Economic Committee also found that inflation in Texas — since the beginning of the pandemic — outstripped the national average by 1.5 percentage points. That rise in prices was driven in part by a large increase in energy costs, the highest hike of any state in the nation.
Yet there’s still hope in the search for agreeable Texas outposts that are easier than most on your finances. By analyzing the data from Money’s Best Places to Live project of more than 1,300 cities and towns across the U.S., this story identifies five such centers.
We narrowed our choices to Texas locations that fared well overall in that nationwide analysis. But our methodology then further filtered that shortlist to focus on places that boast two pocketbook-boosting factors: a relatively low cost of living and relatively high economic opportunity — as in comparatively plentiful jobs that pay well on average.
These places are not all inexpensive. But they’re all locations where the cost of entry — and of living — is lower than in most other similarly desirable places in Texas, as identified in our survey. And your odds of making enough in these locations to cover your expenses are above the state norm.
We’ve listed the five in order of what we call their economic appeal — which equally weighs their cost of living and economic opportunity.
1. Round Rock, Texas
2. Lewisville, Texas
3. Murphy, Texas
4. Missouri City, Texas
5. Sugar Land, Texas
Round Rock, Texas
Anyone looking for places to live in Texas doesn’t need to be told that Austin is a desirable destination for many; the capital’s sobering home prices (a median of $674,546 so far in 2022) and choking traffic on the MoPac expressway speak for themselves.
But in Central Texas, just 20 miles north of Austin, lies a thriving community where the median home price is over $200,000 less than in the capital (albeit still an eye-popping $469,293). And Round Rock — named for the stone that once marked a safe place for wagons and cattle to cross the area’s Brushy Creek — offers a lot of other economic upsides compared to the city that’s a half hour or so drive down I-35.
Round Rock’s median household income is higher than Austin’s by nearly $10.000, and its jobless rate as of July 2022 was a full percentage point lower. The town’s low property taxes and tax breaks for businesses have drawn the likes of Dell Technologies, a huge local employer, and automation specialist Emerson, which has a global innovation center here.
- Population
- 126,548
- Median Household Income
- $97,275
- Median Home Price
- $469, 293
- Unemployment Rate
- 3.1%
Sources: Population and median household income provided by Synergos Technologies Inc.; unemployment rate (by county) provided by the Bureau of Labor Statistics; and median home price provided by ATTOM Data Solutions.
Lewisville, Texas
Texas isn’t known for its low property taxes, but Lewisville might just be the exception — at least for the state’s Dallas region. According to local survey data, the city ranks No. 1 in the metro for lowest annual costs, which include property and sales taxes, water charges and sewage expenses. (It’s claimed the crown five years running, too).
But it’s not just low costs that Lewisville has to offer. Unemployment sits at a mere 3.4%, and while its 45-minute drive from both downtown Dallas and nearby Fort Worth certainly has something to do with that, the town’s bustling local economy provides ample job opportunities as well. Big names like Xerox, SYSCO, JPMorgan Chase and FedEx all have outposts here, and with one of the region’s lowest corporate tax rates, additional employers are all but guaranteed.
Income-wise, Lewisville residents fare quite well, making just over $89,000 per household annually — well above state averages. When you throw in the low costs of living (the lowest among our Texas top five), this North Texas spot appears a slam-dunk for value-seeking relocators. – by Aly J. Yale, a personal finance writer based in Houston, Texas.
- Population
- 112,899
- Median Household Income
- $89,079
- Median Home Price
- $368,414
- Unemployment Rate
- 3.4%
Sources: Population and median household income provided by Synergos Technologies Inc.; unemployment rate (by county) provided by the Bureau of Labor Statistics; and median home price provided by ATTOM Data Solutions.
Murphy, Texas
Murphy epitomizes those one-time Texas farming towns that have been reborn as bedroom communities — and upscale ones at that. A hamlet of just 136 inhabitants in 1970, Murphy has grown into a thriving center in 2022, with a population of more than 20,000 and a median annual income of $130,226.
Many residents are drawn to Murphy’s new and large homes and the town’s schools. The latter are part of the highly rated Wylie and Plano independent school districts, based in Murphy’s neighboring suburbs to the east and west.
Because properties in Murphy tend to be expansive and well-equipped, real estate prices rival those in far-bigger Plano, with the median Murphy home selling for $496,314 in 2022. Yet the town’s high median income — far and above the state average — can make homes more affordable here than in other, less-handsomely-paid picks on our Texas shortlist, such as Round Rock and Lewisville.
Descriptions of Murphy often emphasize its family-friendliness and quiet atmosphere. If those terms to you signify a certain dullness, the bright lights of Dallas are just 30 miles away — close enough to see a concert, take in a Stars or Mavericks game or enjoy an evening of big-city entertainment, if you’re so inclined.
- Population
- 21,143
- Median Household Income
- $130,226
- Median Home Price
- $496, 314
- Unemployment Rate
- 3.3%
Sources: Population and median household income provided by Synergos Technologies Inc.; unemployment rate (by county) provided by the Bureau of Labor Statistics; and median home price provided by ATTOM Data Solutions.
Missouri City, Texas
As Houston’s home prices have overheated and its traffic has intensified (it’s now the worst of any Texas city, according to navigation firm Tom Tom), homebuyers have headed for affordable yet desirable suburbs on its outskirts.
Missouri City ranks high on that shortlist. At $310,745, the median home here costs about 10% less than in nearby Space City (aka. Houston). It beats Houston on almost every other economic measure, too. Its median income of $102, 627 is more than $25,000 above that of Houston proper, while its unemployment rate is lower. And though plenty of residents commute to downtown — a drive of about 40 minutes or so, at least out of rush hour — there are also a number of thriving local employers, including the headquarters for a major franchisor of Pizza Huts that employs about 1,000 people.
When it comes to quality of life, though, Missouri City doesn’t quite measure up to Sugar Land (a rival Houston suburb that’s another one of our picks). The town has its rough side; local officials recently cracked down on “illicit massage businesses,” for example, of which there were some 16 within the Missouri City limits.
But Missouri City isn’t without its attractive diversions and, notably, its house prices are sweeter for buyers than those of neighbor Sugar Land — where the median home costs nearly $100,000 more. You’re also close enough to the fellow ‘burb to quickly reach its Houston Museum of Natural Science branch and its Constellation Field, home to the appropriately named Space Cowboys baseball team — the triple-A affiliate for the Houston Astros.
- Population
- 85.946
- Median Household Income
- $102,627
- Median Home Price
- $310,745
- Unemployment Rate
- 4.4%
Sources: Population and median household income provided by Synergos Technologies Inc.; unemployment rate (by county) provided by the Bureau of Labor Statistics; and median home price provided by ATTOM Data Solutions.
Sugar Land, Texas
Sugar Land’s Smart Financial Centre may be just an arts venue (and a locally well-known one at that), but the name tells you all you need to know about this southwest Houston suburb.
Nestled a mere 23 miles from the heart of Space City, Sugar Land’s financial prospects are strong. Compared to its big-city neighbor, unemployment is lower (4.4% vs. 4.8%), incomes are higher (a median income of $121,665 vs. $77,908) and the cost of living is more affordable, too.
If that weren’t enough, the diverse city is also home to 13 company headquarters, including its namesake — Imperial Sugar — and Texas Instruments (you might know them from those bulky calculators you had back in high school). A whopping 20 biotech companies and eight manufacturing companies also have a footing in the area.
Looking ahead, Sugar Land’s economy seems poised for even more growth. Over the next 10 years, job opportunities are projected to jump nearly 3%. For those with bachelor’s and post-graduate degrees, estimations are even higher. – by Aly J. Yale, a personal finance writer based in Houston, Texas.
- Population
- 123,222
- Median Household Income
- $121,665
- Median Home Price
- $399,250
- Unemployment Rate
- 4.4%
Sources: Population and median household income provided by Synergos Technologies Inc.; unemployment rate (by county) provided by the Bureau of Labor Statistics; and median home price provided by ATTOM Data Solutions.
Other places we considered
These cities are among those that didn’t make the cut for our shortlist. They lacked the combination of relatively low costs of living and comparatively high economic appeal — as in having plentiful jobs that pay well. One of them, Hutto, did make the main Money list of Best Places to Live, which focuses less heavily on finances in its criteria.
Houston
Fort Worth
San Antonio
Hutto
Dallas
Austin
Methodology
We selected these Texas cities first by considering only those that did fairly well — ranking within the top 15% — in our national analysis of Best Places to Live. The methodology for that main ranking considers financial priorities, including the housing market and income, along with a host of other factors, including health and safety, education, population diversity, quality of life and amenities.
The five places we selected stood out in a second analysis that emphasized affordability. Among those high-ranked cities overall, we looked at those with an especially good combination of cost of living, including the typical tab for housing, and economic opportunity — the presence of ample work at relatively high compensation.
This story is sponsored by Amerisave, but the methodology, selection of places and content was created independently by the Money Research Collective.
A guide to moving to Texas
Are you thinking of making Texas your new home — or perhaps simply relocating within the state? Here’s what you need to know before you make the move.
Key things to know before moving to Texas
The Lone Star State is known for such distinctions as country music, Texan pride, ranching and oil.
And then there’s the weather. The average annual temperature in Texas is 66.1 F, according to the National Oceanic and Atmospheric Administration (NOAA) National Centers for Environmental Information. That makes it the fourth-hottest state.
Summers are extremely hot and humid, particularly near the coast. The hot season typically lasts from the end of May through mid-September, peaking in July. Throughout this time, temperatures can reach the 90 to 100-degree-plus range. The Dallas-Fort Worth metropolitan area had 47 days this year (through Aug. 31) with temperatures 100 degrees or above, according to the National Weather Service (NWS). Texas has short, dry winters from the end of November through February.
The Panhandle is the coolest part of the state with the highest chance of snow. There is also a risk of extreme weather, including tornadoes and, most commonly, hurricanes.
Taxes are a little different in Texas than in most other states. There is no state income tax, but other taxes are relatively stiff. Property tax rates are set by the local governments, but are some of the highest in the U.S. at about an average of 1.7% to 1.8%. (The national average hovers about just above 1%.) The sales tax is 6.25%, but local jurisdictions can charge up to 2% in additional tax.
The population has been growing rapidly for the last decade. According to the U.S. Census Bureau, Texas’s population increased by 15.9% from 2010 to 2020. That’s more than double the national growth rate of 7.4%.
What are the pros of living in Texas?
With the population growing so fast, people are drawn to Texas for several reasons. One of the biggest draws is that land is more plentiful — and more affordable — than in other states.
Texas has much more room for development and fewer building restrictions than other states. The average cost of a Texas home is $314,837, according to the Zillow Home Value Index. Rent is also more affordable than other states in America — with a median cost of $1,082 per month, according to the Census.
Texas has a strong economy and robust job market. It’s home to many Fortune 500 companies and has the second-largest economy by Gross Domestic Product (GDP) in the U.S. (second to California). The Texas Workforce Commission (TWC) reports that 687,500 jobs were added in the state between January 2021 and March 2022.
Another attractive aspect of the state is its rich culture and history, including such landmarks as the Alamo, and its racial diversity, at least in its larger cities.
What are the cons of living in Texas?
The idea that Texas is big is no myth. The state is so large that even intrastate travel can be very time consuming. Driving across the state, from east to west or north to south, takes upwards of 12 hours. The drive from Dallas to Houston can take up to five hours (crossing the Houston metro can take you two hours alone).
On top of that, public transportation within Texas cities is limited. Most people who move to the state will need a car with adequate car insurance. Since driving is the most popular way to get around, traffic is an issue in urban areas, especially the Houston, Austin and Dallas-Fort Worth areas.
Another hitch to living in Texas is its health care system, especially in outlying areas. In rural Texas, the nearest medical facility may be a long drive. Texas also has a high rate of people who are uninsured — 20.4% of people over age 65, compared with the U.S. average of 9.4%.
What is the average cost of living in Texas?
According to the Bureau of Economic Analysis (BEA), the average consumption expenditure per individual (PCE) in Texas is $39,661 per year. This includes costs for food, housing, recreation, health care, energy and personal spending. That’s actually lower than the U.S. average of $42,635.
BEA found that Texans spend about $3,309 per year, per person on groceries (non-restaurant food), which is about $276 per month. On health care, Texans spend $5,793 per year, per person, which is about $483 per month. Both of these are below the U.S. average of spending.
The Census reports a median $1,082 spent per month on rent, though this varies by area. For example, in Waco, the median is $879 per month while in Austin, it’s $1,346.
Where is the safest place to live in Texas?
The safest city in Texas is Trophy Club, a suburb of the Dallas-Fort Worth metroplex, according to safety research company SafeWise. The community’s property crime rate per 1,000 people was just 4.9, which is less than a quarter of the rate across the state.
After Trophy Club, the next best cities for safety are Fulshear, Fairview, Colleyville and Memorial Villages. These cities have the lowest crime rates for violent crimes and property crimes (which can also help lower home insurance rates).
– By Alison Tobin, News Editor for the Money Research Collective.
Best places to live in Texas FAQ
When is the best time to move to Texas?
The best time to move to Texas is fall — that is, between late September and the end of October. At that time, you avoid the extreme weather that can occur during other parts of the year. Tornadoes are a potential threat during the spring and early summer months. Summer is also unusually hot in the state, and areas close to the Gulf are susceptible to hurricanes and tropical storms, which are most likely between August and October.
If you choose to move in the fall, you'll also likely have a better chance of getting a moving company on time. Some of the best moving companies may be busy and booked up in the summer months.
What are the best places to live in Texas for families?
Many of the suburbs near main cities in Texas — Houston, Austin, Fort Worth, Dallas and more — are family friendly, with highly-rated public schools and parks. In particular, a handful of Dallas suburbs are considered some of the best places to raise a family in Texas; Richardson and Coppell are among these.
Which city in Texas has the best weather?
Climate can partly be a matter of personal preference, but many consider Texas Hill Country to be the area of the state with the best weather. Out of the largest cities, Austin is the city of choice for many. It has long, hot summers and short, mild winters. The spring and fall seasons are warm and enjoyable.
In Austin, summer temperatures average in the 80s and 90s. The winters are usually in the 50s and 60s range, according to NOAA. Additionally, Austin doesn't take the brunt of the worst hurricane damage because, unlike Houston, it is further away from the Gulf of Mexico coast.
If you'd rather have more definitive seasons, you can find that in the Dallas-Fort Worth area. It's cooler in the winter — averaging in the 40s and 50s in January and February.
If you don't like the heat and find appeal in smaller centers, you may prefer cities in the Panhandle area, such as Amarillo or Lubbock. These have a cooler climate, with summer temperatures in the 70s or low 80s and winter ones in the 30s and 40s on average.
Paul Reynolds is the News and Strategy Editor for the Money Research Collective, which creates content for McClatchy, including for this newspaper. He has extensive experience in writing and editing personal finance stories for titles including Money, Consumer Reports, ValuePenguin, and Investopedia.