Overview
Texas is the second-largest state by both area and population, known for its strong economy, no state income tax, and relatively affordable housing compared to coastal states. Major industries include energy, technology, healthcare, and manufacturing.
Texas Real Estate Market
Texas has experienced significant population growth, driving strong demand for housing. Major metros like Austin, Dallas-Fort Worth, Houston, and San Antonio have seen rapid price appreciation. While prices have cooled from pandemic highs, the market remains competitive with strong long-term fundamentals.
Property Taxes in Texas
Texas has no state income tax, but property taxes are among the highest in the nation. Rates vary significantly by county and school district.
Average effective rate: 1.80%
Annual tax on median home: ~$5,670
Homestead exemption: $40,000 from school taxes for primary residence
First-Time Buyer Programs
TDHCA Programs: The Texas Department of Housing and Community Affairs offers:
- My First Texas Home - 30-year fixed-rate mortgage with down payment assistance
- Texas Mortgage Credit Certificate - Tax credit for mortgage interest
- Down Payment Assistance - Up to 5% of loan amount
Closing Costs in Texas
Closing costs in Texas typically range from 2-3% of the purchase price.
Common costs include:
- Title insurance: Based on state-regulated rates
- Attorney/escrow fees: $500-$1,500
- Survey: $300-$500
- Recording fees: $50-$150
Frequently Asked Questions
Texas has no state income tax, so local governments rely heavily on property taxes to fund schools and services. The trade-off is that residents don't pay state income tax.
Yes, Texas offers relatively affordable housing compared to coastal states, strong job markets, and various first-time buyer assistance programs. The lack of state income tax helps offset higher property taxes.
Texas offers a mandatory $40,000 homestead exemption from school district taxes for your primary residence, plus additional exemptions for those 65+ or disabled.