Mortgage Calculator for Texas

Texas Housing Market Overview

Texas stands out for its dynamic housing market, driven by a rapidly growing population and diverse regional economies. As of 2026, the median home price in Texas is approximately $355,000, though prices vary widely from affordable, smaller towns to high-demand urban centers like Austin and Dallas. The state has seen steady price appreciation over the past several years, fueled by strong job growth and continued inbound migration. Notably, cities such as Houston and San Antonio remain relatively affordable compared to national averages, while Austin has seen some of the fastest price increases in the country.

Property Taxes in Texas

Texas is known for having some of the highest effective property tax rates in the nation, averaging roughly 1.6% to 2.2% of assessed value, depending on the county. Unlike many states, Texas does not have a state property tax; instead, local governments set rates to fund schools and infrastructure. Homeowners can benefit from several exemptions, including the standard homestead exemption, over-65 exemption, and disability exemptions, which can significantly lower the taxable value of a primary residence. Here’s a breakdown of property taxes in some of Texas’s largest counties:

Texas’s homestead exemption reduces taxable value by at least $40,000 for primary residences, and additional reductions are available for seniors and disabled homeowners. These exemptions can offer substantial annual savings for qualifying households.

Homeowners Insurance in Texas

In Texas, homeowners insurance costs are typically higher than the national average due to exposure to severe weather, including hurricanes along the Gulf Coast, tornadoes, and hailstorms in the central and northern regions. Flooding is a concern in many areas, though standard policies do not cover flood damage. As of 2026, the average annual premium is approximately $2,900, among the highest in the country. The state offers the Texas FAIR Plan Association, a last-resort insurance pool for those unable to obtain coverage through the regular market, especially in high-risk coastal zones.

Buying Costs and Fees in Texas

Closing costs for homebuyers in Texas typically range from 2% to 5% of the purchase price. For a $350,000 home, buyers can expect to pay between $7,000 and $17,500 in closing fees, which may include lender fees, title insurance, appraisal, and escrow costs. Texas does not impose a state mortgage tax, transfer tax, or documentary stamp tax, making it less expensive on this front compared to many states. Generally, buyers pay for lender fees, appraisal, and inspection, while sellers are responsible for the owner’s title policy and realtor commissions.

Texas Housing Market Details

With a population surpassing 30 million as of 2026, Texas is the second most populous state in the U.S., experiencing robust annual growth, particularly in urban areas. The influx of residents is driven by job opportunities, affordable living costs, and business-friendly policies. Urban centers like Austin, Dallas, and Houston have seen the most significant gains, while rural areas remain more affordable but experience slower appreciation. Here’s a look at the largest cities and their housing markets:

Urban homes generally command higher prices and see faster appreciation, while rural properties offer more space and affordability but with less demand pressure.

Economic Factors in Texas

Texas does not levy a state income tax, making it attractive for residents and businesses alike. The combined state and local sales tax rate is typically between 6.25% and 8.25%. The state’s economy is anchored by major industries including energy (oil and gas), technology, healthcare, and aerospace, with major employers such as ExxonMobil, Dell, and Texas Instruments. As of early 2026, the unemployment rate hovers around 4.1%, slightly below the national average. The overall cost of living in Texas is generally lower than in many coastal states, especially for housing and utilities.

Mortgage and Foreclosure Laws in Texas

Texas primarily uses a non-judicial foreclosure process, which allows lenders to foreclose on a property without going through the court system, making the process faster and less costly. This means buyers should be aware that foreclosure timelines can be relatively short, sometimes as little as 60 days from default to sale. Texas law requires sellers to provide a detailed property disclosure statement, outlining any known defects or issues with the home. Unique to Texas, home equity lending rules are stricter than in many states, including a cap on total home equity borrowing at 80% of the home’s appraised value.

First-Time Homebuyer Programs in Texas

The Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA) both offer a variety of programs for first-time homebuyers. Popular options include:

• My First Texas Home – Offers 30-year fixed-rate mortgages with down payment assistance up to 5% of the loan amount; income and purchase limits apply.
• Texas Mortgage Credit Certificate (MCC) – Provides an annual federal tax credit of up to $2,000 for qualified homebuyers using approved lenders.
• TSAHC Home Sweet Texas Home Loan – Designed for low and moderate-income Texans, this program offers competitive rates and down payment assistance grants.
• TSAHC Homes for Texas Heroes – Special assistance for teachers, police, firefighters, and veterans, including down payment and closing cost grants.
• USDA Rural Development Loans – Available in eligible rural areas, offering 100% financing with no down payment for qualifying buyers.

Many of these programs require buyers to complete a homebuyer education course. Some grants and forgivable loans are also available for targeted populations or specific regions within Texas, helping to make homeownership more attainable.

Frequently Asked Questions