If you’re curious about the cost of living in Austin, TX, one of the coolest cities in the U.S., we've got you covered. This city is becoming a relocation hot spot. According to the Texas State Data Center’s 2022 Population Projections, the city could grow to over 3.6 million people by 2040!

That's right; Austin is quickly gaining popularity year after year, thanks to its vibrant culture, thriving business hub, and attractive housing options.

In this guide, we’ll explore Austin's cost of living, covering everything from the housing market to salary considerations, everyday expenses, and more. Get ready to discover why Austin is the place to be.

Summary:

• Cost of Living in Austin, TX
• Housing Cost Austin, Texas
• Other Living Expenses in Austin, TX
  • Grocery Shopping and Dining Out in Austin
  • Transportation Options and Fuel Costs in Austin
  • Healthcare and Insurance Costs in Austin
  • Cost of Utilities in Austin
  • Tax Rates in the Austin Area
  • Recreation Costs in Austin, Texas
• Average Salary in Austin
• Tax Benefits for Homeowners in Austin
• Average Cost to Build a New Home in Austin by Neighborhood
• Conclusion

Cost of Living in Austin, TX

Austin has a fascinating history, from its pioneer roots to becoming the dynamic state capital of the Republic of Texas. Named after the renowned "Father of Texas," Stephen F. Austin, Austin is a cultural hub that includes Travis, Hays, and Williamson counties.

In addition to its rich history, this city boasts a celebrated food and music scene that will keep you entertained. Did you know that Austin, Texas, is not only the birthplace of Whole Foods® but also one of the top beer destinations in the world? Plus, with pleasant temperatures and an average of 300 sunny days annually, Austin is a paradise for outdoor enthusiasts all year round.

Now, let's dig into the numbers and discuss the Austin cost of living index. According to September 2023 data from the Council for Community and Economic Research (C2ER®), the Austin cost of living compared to the national average is just 1% higher. However, C2ER also reports the city is 16% higher in housing costs, though utility costs in Austin are more budget-friendly at 6% lower than the national average. Compared to the rest of the Lone Star State, the Austin, TX, cost of living index is 10% higher.

But don't let these figures deter you. Despite the Austin cost of living increase compared to other areas in the state, the city is ranked the 89th most expensive city out of 304 by NerdWallet®. That means you can enjoy its urban appeal and a comfortable balance between city living and affordability.

Housing Cost Austin, Texas

When talking about the cost to live in Austin, TX, the biggest expense is typically housing.

As of November 2023, Realtor.com® reports the median listing home price in Austin to be $635K, with a price per square foot of $368, holding steady year-over-year. Realtor.com also finds the median home sold price was $492.3K. This lower median sold price compared to the average listing price suggests buyers may have been able to negotiate better deals or that sellers have adjusted their prices to meet market demands, indicating Austin may be a buyer’s market.

As of September 2023, the mortgage rate in Austin averaged 5.18%, per C2ER, a significant factor to consider when making financial plans for your dream home.

For many, housing comes down to whether to rent or own. RentCafe®, which combines its proprietary data with C2ER’s data, states that as of September 2023, the monthly rent in Austin averages $1,753.

Other Living Expenses in Austin, TX

Making Austin your home is more than finding and affording the perfect residence. The monthly cost of living in Austin, TX, involves everyday essentials, too. Let's explore other Austin, Texas, living expenses, from grocery costs to childcare and everything in between.

Grocery Shopping and Dining Out in Austin

Naturally, having your kitchen stocked with everything you need is an essential expense. Let's discover how much you need to fill your pantry and enjoy dining out in this lively Texan city.

According to C2ER data from September 2023, Austin residents get a bit of a financial break for standard necessities like food, with groceries approximately 9% less expensive than the national average. When it comes to everyday food items, here's a snapshot of prices you can expect in Austin, TX, per C2ER’s 2023 data:

• A gallon of milk: $2.76
• Dozen eggs: $2.83
• A pound of potatoes: $4.11
• Loaf of bread: $3.65

Lower grocery costs give you more room in your budget to sample the diverse food scene in Austin and savor world-renowned culinary options. Various sources report that in 2023, you can expect the cost of dinner for two at a mid-range restaurant to run $87–$100.

Transportation Options and Fuel Costs in Austin

Transportation expenses in Austin depend on several factors, with fuel costs taking center stage. A gallon of unleaded gas in Austin is approximately $2.685, according to AAA® as of January 2024.

Maintaining your vehicle is as essential as fueling it. While prices can vary and hinge on the repair or maintenance needed, $53.43 for a tire rotation is an example of an average service cost in Austin, as reported by C2ER in September 2023.

If you’d rather have someone else do the driving, you can catch a ride on the CapMetro Bus System, where a one-day pass costs $2.50 and a monthly pass is $41.25.

Healthcare and Insurance Costs in Austin

Healthcare services, another essential Austin, TX, price of living factor that includes routine check-ups and dental care, cost 2% higher than the U.S. average, per C2ER data from September 2023. C2ER derives this benchmark from the fees of doctor visits and specialized services like optometry.

Maintaining your health is vital, and in Austin, you'll find a range of healthcare options to cater to your needs. When it comes to specific healthcare costs in Austin, C2ER reports the following prices:

• A visit to the doctor averages $119.63.
• Prioritizing your dental health can run approximately $120.40.
• Optometry appointments are around $118.08 for a vision check.
• Over-the-counter medication costs vary, but a standard bottle of Ibuprofen averages $9.39.

Cost of Utilities in Austin

Knowing the cost of utilities in Austin, TX, is a must, from keeping the lights on to staying connected with Wi-Fi. Whether you own or rent, utility expenses are part of the equation.

The costs of utilities in Austin cover standard services like energy and telecommunications. In Austin, the average monthly energy bill is around $156.31, and phone services are about $201.20 per month, as reported by C2ER in September 2023. Compared to the national average cost of living, Austin, Texas, is 6% lower for utilities per C2ER.

Tax Rates in the Austin Area

Taxes can sneak up on you, especially as a new homeowner. Understanding the tax rates in your area is crucial when establishing your roots.

As of November 2023, the Austin Chamber of Commerce notes the state’s sales and use tax is 6.25% on tangible personal property and certain services. However, local entities, such as cities, counties, and transit authorities, may have their own sales tax rates, which can add up to a maximum combined rate of 8.25%.

Recreation Costs in Austin, Texas

Life in Austin is also about enjoying all the culture, amenities, and activities available. Entertainment costs and everyday services can vary, but NerdWallet's 2023 data sheds insight into what your recreational budget might require: 

• Movie ticket: $12.41
• Yoga class: $19.93
• 6-pack of Heineken® beer: $10.28 

As of September 2023, C2ER reported clothing costs in Austin are approximately 2% less than the national average, meaning you can express your distinctive style without emptying your wallet. 

As of January 2024, Care.com® sheds light on the childcare landscape in Austin. The average base rate for childcare providers is $19.80 per hour, which translates into a weekly cost of $792 and a monthly expense of approximately $2,574 for 130 hours of dedicated care.

Average Salary in Austin

To build a thriving life in Austin, let’s discover the average income residents bring home and delve into the general salary range of this bustling Texan city. 

Per ZipRecruiter®, as of December 2023, the salary spectrum in Austin is diverse, spanning from $50,239 to $84,947 annually. ZipRecruiter also notes the average annual salary in Austin is $68,525, which equates to approximately $32.94 per hour, $1,317 per week, or $5,710 per month. 

Other sources tend to fall within the salary range reported by ZipRecruiter. According to C2ER data from September 2023, the median household income in Austin is $78,965. NerdWallet's 2023 data reveals the median salary in Austin, TX, to be $51,596. 

These figures offer a valuable benchmark for estimating your potential earnings in the city and understanding how they compare to your current location.

Tax Benefits for Homeowners in Austin

Texas is well known for having no individual state income tax, making it an attractive option for those considering relocation. As of 2024, the state sales tax is 6.25%, and the Austin sales tax rate is 1%, per Avalara®, and you can expect an 8.25% minimum combined sales tax rate in Austin. The MIT® Living Wage Calculator data, as of February 2024, estimates that a single adult pays roughly $6,600 in taxes annually, while a household of four, two adults with two children, pays an average of $10,900 each year.

Property tax is levied locally, not by the state, and there are property tax exemptions for those who qualify, according to the Texas Comptroller’s website in 2024. These include homestead exemptions, among others. 

Additionally, the Austin Chamber of Commerce notes that local development organizations collaborate to create competitive incentives for qualified companies to help boost the business climate in Austin.

Average Cost to Build a New Home in Austin by Neighborhood

If you’re considering building a home rather than buying one to create the perfect fit for your lifestyle, we're here to guide you through the average cost of building new homes in Austin, TX.

Buda

Buda, Texas, is a charming town just 15 miles south of downtown Austin. Balancing small-town vibes with the vitality of the Texas Hill Country, Buda offers spacious natural areas, a quaint historic downtown, and a thriving local community. With a rich heritage and modern amenities, Buda offers a unique blend of experiences, from chef-prepared delicacies to boutique discoveries. Known as the “Outdoor Capital of Texas,” Buda has numerous parks to explore, making it an ideal home for homebuyers seeking a community with diverse recreational opportunities. 

According to NewHomeSource™, in January 2024, building a new 3-bedroom, 2-bath home in Buda ranges from $280K to $600K. Our new homes in Buda, TX, start in the low $300Ks, with a range of choices to suit your preferences and budget.

Georgetown

Georgetown, TX, is a city teeming with history, culture, and growth. Founded in 1848, Georgetown is the picturesque county seat of Williamson County, boasting the title of the “Red Poppy Capital of Texas.” Its historic downtown, often called the “Most Beautiful Town Square in Texas,” features over 40 retail shops, 45 restaurants, and three wine-tasting rooms, offering a charming backdrop for potential homebuyers. Recognized as a Great American Main Street City and designated the Downtown Georgetown Cultural District, this city offers a rich array of arts and culture. 

To build a new 3-bedroom, 2-bath home in Georgetown ranges from $299K to $450K, per NewHomeSource in January 2024.

Jarrell

Jarrell is a small town with big-city amenities and a flourishing business hub 38 miles from Austin. Jarrell combines small-town charm with metropolitan conveniences, making it an appealing choice for those seeking community and a relaxed lifestyle. Home to several manufacturing companies like Taylor Press Products® and APS Industrial Services®, Jarrell is also a convenient drive to Austin for work or access to big-city life. Surrounded by gorgeous landscapes and parks, Jarrell offers both a serene setting and the allure of nearby Austin attractions. 

As of January 2024, NewHomeSource finds the cost to build a new 3-bedroom, 2-bath home in Jarrell ranges from low $200Ks to mid $300Ks. Our new homes in Jarrell, TX, start in the upper $200Ks.

Leander

Leander, TX, located on the northeast edge of Texas Hill Country and ten miles west of north of Austin, has experienced remarkable growth over the past two decades. Affordability, quality schools, and diverse housing options, from first-time to executive-styled living, have been pivotal in attracting residents. 

Building a new 3-bedroom, 2-bath home in Leander ranges from $359K to $579K, with some priced even higher, per Realtor.com in January 2024.

Round Rock

Round Rock, Texas, is a thriving city just 15 miles north of Austin in the Central Texas Hill Country. With a population exceeding 130,000, Round Rock is home to major employers like Dell®, Round Rock Premium Outlets®, and Amazon®. Known for its award-winning park system and quality school district, Round Rock combines a high quality of life with economic growth. 

According to NewHomeSource, as of January 2024, to build a new 3-bedroom, 2-bath home in Round Rock ranges from the mid $300Ks to mid $500Ks.

Conclusion

Whether you're a history buff, a music lover, or simply looking for an affordable city with plenty of sunshine, Austin could be the perfect place for you. The warm and welcoming atmosphere, cost of living, housing market, and everyday expenses mean Austin has something for everyone. 

Finding a home in Austin is competitive but also brimming with opportunities for both buyers and renters. Explore popular neighborhoods like Buda, Georgetown, Jarrell, Leander, and Round Rock, each with its own charm and lifestyle, and discover the city's incredible recreational and cultural offerings that will make you feel right at home. 

Austin also boasts numerous tax benefits, affordable healthcare options, and proximity to major employers. It's more than just a place to live; it’s a place where you can truly thrive. The city is an affordable destination that helps ensure a brighter future.

Explore new homes in Austin, TX, today or browse more Centex® blogs.

Written By: Jordan Thomson, Freelance Writer