Texas Real Estate: What You Need to Know in 2025

Did you know Texas added more than 500,000 new residents last year? That surge pushes prices up, squeezes rentals, and changes the tax picture. Whether you’re hunting a starter home, eyeing an investment property, or just curious about rent, this guide breaks down the real stuff you’ll face.

First off, Texas doesn’t have a state income tax, so you keep more of your paycheck. That sounds great, but the state makes up the shortfall with higher property taxes. Knowing how those numbers work can save you thousands.

Buying a Home in Texas

The median home price in Austin sits around $550,000, while Dallas hovers near $420,000. If those figures feel steep, consider suburbs like Fort Worth or San Antonio, where you can snag a decent house for $300,000‑$350,000. Look for homes built after 2000; they usually have newer roofs and energy‑efficient windows, which cut utility bills.

When you get a mortgage, aim for a 20% down payment. It lowers your loan amount and helps you avoid private mortgage insurance (PMI). If you can’t swing 20%, ask the lender about a low‑down‑payment loan, but be ready for higher monthly costs.

Don’t skip a home inspection. Texas weather swings from scorching heat to sudden storms, and a thorough inspection can spot foundation cracks, roof damage, or outdated wiring before you sign.

Renting and Taxes in Texas

Rental demand is fierce in cities with big tech hubs, so landlords often require a credit score of 650+. Expect to pay a security deposit equal to one month’s rent, and be ready for a background check that looks at evictions and criminal history.

The average rent in Houston is about $1,350 for a two‑bedroom apartment. In smaller towns, you’ll find two‑bedrooms for $900‑$1,100. If you’re a tenant, ask the landlord if utilities are included—this can change your monthly outlay dramatically.

Property tax rates vary by county but average 2.3% of the home’s assessed value. In Harris County, that means a $300,000 home costs roughly $6,900 a year in taxes. Some cities offer homestead exemptions that shave off up to $25,000 of the assessed value, lowering your bill.

Finally, keep an eye on market trends. Texas saw a 12% rise in home sales last quarter, driven by out‑of‑state buyers. If you’re investing, a rental property in a growing suburb can yield a 7%‑9% cash‑on‑cash return. Just run the numbers: purchase price, expected rent, taxes, insurance, and maintenance. If the math checks out, you’re on a solid path.

Bottom line: Texas offers low taxes and a booming market, but you need to balance home price, property tax, and rental demand. Use this guide as a checklist, ask local agents for up‑to‑date data, and you’ll make a confident move in the Lone Star real estate scene.