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Colorado Cost of Living vs Texas

Colorado Cost of Living vs Texas: When relocating from your current residence to a new location, finding out the cost of living in the city of choice should always be the first step in your plans.

In this article, we will be discussing Colorado’s cost of living vs Texas, so as to help folks in search of a new home and are interested in moving to either Colorado or Florida to make a suitable choice between the two which is better suited for their lifestyle financially.

Let’s explore the Comparison of Colorado’s cost of living vs Texas using the underlying points to know which of the State is more expensive than the other.

 

Cost Of Housing Market in Texas vs Colorado

The housing market is a very important aspect to be considered in the comparison of Colorado cost of living vs Texas and the first on our list.

When you consider the fact that the median home price in Texas is close to $244,000, it is much more affordable to purchase a home here than in the state of Colorado. With Colorado’s median home price of nearly $500,000, you’d be looking at spending more than two times the amount for a home in Colorado compared to Texas.

Over the course of the last year, Texas home values have risen by around 8.5 percent. Limited inventory is the major contributing factor to increasing home prices, as there are fewer homes for sale in Texas now than at any point during the last twenty years. This is a classic case of supply and demand imbalance. Homes on the market are receiving several offers, with many of them selling for higher than the asking price.

Like Texas, Colorado is going through a demand problem. With the state being such a desirable state for transplants, many people have been flocking to Colorado. In fact, during the COVID-19 pandemic, people flooded into the state at record rates and apartment-dwellers desired more square footage.

As a result, Colorado has become one of the most expensive housing markets in the country. In Denver alone, the amount of money that’s bid over the asking price is also at record-high levels.

Well it may be a great time to be a seller in both Texas and Colorado, both markets are incredibly competitive for buyers and home prices are more expensive than normal. Regardless, even with the higher median home prices, it is still cheaper to purchase a home in Texas than in Colorado.

 

Cost Of Home Prices in Texas vs Colorado Comparison

Median home prices are ultimately based on the specific city and county that you live in in a particular state, and this is certainly true for both Texas and Colorado. The following table outlines some of the major cities in Texas and Colorado, along with their associated median home prices:

City
Median Home Price

Houston, TX
$220,000

Austin, TX
$551,200

Dallas, TX
$259,800

Denver, CO
$545,000

Colorado Springs, CO
$427,900

Boulder, CO
$850,000

 

With an abundance of employment opportunities and a booming economy, Colorado has become one of the fastest-growing states in the nation. These advantages, paired with the state’s breathtaking landscapes and outdoor lifestyle, are why so many people are moving to Colorado. However, more affordable housing is considered a major advantage of settling in Texas over Colorado.

Of course, homes are pretty pricey in places like Austin, but if you choose to live in cities like Dallas, Fort Worth, and Houston, median home prices are much lower than the national average. Whereas, you’ll find that a large majority of Colorado’s most popular cities have median home prices above the national average.

While there may be some cities in Texas that have higher home prices than other U.S. states, housing costs are still almost 50% cheaper than in Colorado.

 

Rent Prices in Texas vs Colorado

Between 2019 and 2020, the average monthly rent in the U.S. decreased in 12 states, with Texas being one of them. With its’ average statewide rental price of $1,045 per month, rent in Texas cities is generally lower than the national average.

Though, rental prices tend to vary quite a bit depending on where you live in the state. For example, Flower Mound, Texas has the most expensive rental prices in the state at $1,685, while the cheapest rates are in the city of Brownsville at just $730 a month.

The table below displays a more detailed look at the average monthly rent in some of the major cities across Texas:

City
Average Rent

Houston, TX
$1,205

Austin, TX
$1,619

Dallas, TX
$1,383

San Antonio, TX
$1,151

Fort Worth, TX
$1,273

Irving, TX
$1,303

 

Dissimilarly, during 2019 and 2020, Colorado was one of the 39 states across the country that experienced an increase in average rental prices.

In fact, Colorado takes the seventh spot on the list of the states with the highest average monthly rental rates in the nation, right behind New York State. The statewide average rent is $1,271, but, like Texas, prices vary based on where you live in the state.

With that said, the following table outlines a more comprehensive look at the average monthly rental prices you can expect in some of Colorado’s most popular cities:

City
Average Rent

Denver, CO
$1,824

Colorado Springs, CO
$1,458

Aurora, CO
$1,563

Boulder, CO
$2,171

Lakewood, CO
$1,710

Fort Collins, CO
$1,706

 

Taxes in Texas vs Colorado

 

There are some distinct differences between the taxes in Texas versus the taxes in Colorado, highlighted in detail below.
State Income Tax: Fortunately, one of the benefits of living in Texas is the lack of state income tax. It is among a select few states in the nation that have no personal income tax.

Whether you’re a doctor, teacher, real estate agent, or dog-walker, come tax season you do not have to file a state income tax return and do not have to pay any sort of state income tax in the state of Texas.

Of course, you’re still required to file a federal income tax return and must pay your federal income taxes – but nothing is required at the state level. Colorado, however, boasts one of the lowest income taxes in the country. The state has a flat income tax rate of 4.83%. This means that no matter your income, you only pay that rate. Colorado is one of nine states that have a flat income tax rate.

 

Sales Tax: At just 6.25%, Texas’ statewide sales tax rate is somewhat modest. Though, when you factor in all of the additional city and county taxes across the state, the highest sales tax rate you could end up paying in Texas is 8.25%.

Unfortunately, most major cities in Texas – like Houston, Dallas, and San Antonio – do hit this sales tax limit.
Among the states that do have a sales tax, Colorado has the lowest in the nation. The base rate in Colorado is just 2.9%, but, like Texas, there are a number of extra city and county sales tax rates.

When combined, you can end up paying as much as 11.2%. For instance, the sales tax rate in San Juan County is 9.4% but the rate in Boulder County is only 5%.

 

Property Tax: Whether you’re thinking about purchasing a home in Texas or Colorado, you must consider the property taxes. Unfortunately, the property taxes in Texas are some of the highest in the nation, with an effective property tax rate of 1.69%.

This means that Texas homeowners pay a staggering $3,390 in property taxes per year, on average. Texas property taxes have been a long-lasting problem between state and local governments.

While some representatives want to constrain the rates, cities, and counties resist this idea, as property taxes are the primary source of income in some areas.

Thankfully, Colorado has one of the lowest property tax rates in the country. The state’s average effective rate is only 0.49% and some areas have rates that are even lower than that. For example, the property tax rate in Gilpin County is only 0.23%.

Taxes in Texas vs Colorado Comparison
State
Income Tax
Sales Tax
Property Tax

Texas
None
6.25% – 8.25%
1.69% (average effective rate)

Colorado
4.3%
2.90% – 11.20%
0.49% (average effective rate)

 

Transportation Costs in Texas vs Colorado

 

Whether you decide to settle in Texas or Colorado, transportation costs are another important consideration involved in calculating the cost of living in either state. These costs include expenses like gas prices, vehicle purchase prices, bus fares, monthly transit passes, and other public transportation fees.

Although both states have transportation costs that are above the national average, the transportation cost index in Texas is 103.3 and 106.7 in Colorado. This means that these expenses are more affordable in Texas, which is evident based on the table below.

Cost Factor
Texas
Colorado

Gallon of gas
$2.15
$2.54

Monthly public transit pass
$45.92
$78.47

Taxi trip in downtown (approx. five miles)
$14.26
$19.82

New Volkswagen Golf
$22,016
$24,614

 

Texas vs Colorado, Which is More Expensive?

 

When you consider Colorado’s cost of living vs Texas’s cost of living index, Texas comes in below the national average and Colorado is considerably above. However, when you compare these two states together, Colorado is about 29% more expensive than Texas.

The cost savings in Texas is primarily contributed to the lower housing costs, but transportation, healthcare, and grocery costs are also more affordable in Texas than in Colorado.

 

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CONCLUSION

Cost of living is one of the main factors that people use to determine whether they want to live in one location versus another. When it comes to Colorado’s cost of living vs Texas, both are among the fastest-growing states in the U.S. and have much to offer potential residents.

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