Buying a Home in Texas in 2026
Texas keeps building, which is why its median stays reasonable even as millions of new residents arrive each decade.
Austin carries the state's premium after its tech boom, Dallas-Fort Worth balances jobs and relative value, and Houston stays the affordability anchor. House-hunting in Texas rewards patience: visit in the off-season too, when crowds thin and you can see what daily life actually looks like.
Texas Property Taxes: The Number That Changes Your Payment
No income tax means property tax does the heavy lifting: the 1.40% effective rate ranks among the nation's highest, and school districts take the biggest slice. On a $340,000 home, that works out to roughly $4,760 a year, or $397 a month, which is among the highest in the nation.
Property tax is part of PITI, the full monthly figure lenders actually underwrite, so it directly limits how much you can borrow. Your Texas lender will almost certainly escrow the tax, which folds it into the monthly payment from the very first statement.
First-Time Home Buyer Programs in Texas
The Texas Department of Housing and Community Affairs (TDHCA) and Texas State Affordable Housing Corporation (TSAHC) runs the state's main programs. Its My First Texas Home below-market rates with down payment assistance for first-time buyers, which can meaningfully lower the monthly payment from day one.
The agency's Texas Mortgage Credit Certificate and Homes for Texas Heroes a federal tax credit on mortgage interest plus targeted help for teachers, nurses, and first responders. In Texas, eligibility hinges on income limits and purchase-price caps, so confirm those before falling in love with a listing.
Worked Example: Buying the Median Texas Home
Here is what the median Texas purchase looks like with 20% down and a 30-year fixed rate near 7.4%, the Freddie Mac average in October 2026:
| Item | Monthly / Amount |
| Home price | $340,000 |
| Down payment (20%) | $68,000 |
| Loan amount | $272,000 |
| Principal and interest (7.4%, 30-yr) | $1,883 |
| Property tax (1.4% effective) | $397 |
| Homeowners insurance (est.) | $99 |
| Total PITI | $2,379 |
A smaller down payment on Texas's $340,000 median means private mortgage insurance on top of PITI until you reach 20% equity; run that version in the calculator to see the real gap.
Closing Costs, Transfer Taxes, and Homestead Rules in Texas
Texas charges no real estate transfer tax, one less closing cost to budget. File the homestead exemption the January after you move in; the $100,000 comes off before school taxes are calculated, which is where most of the bill lives.
Every Texas homeowner gets a $100,000 school-district homestead exemption, with another $10,000 for owners over 65 or disabled, and filing it is free. Expect 2% to 5% of the price in total closing costs on a Texas purchase; the loan estimate is the document that keeps everyone honest.
Frequently Asked Questions
What is the median home price in Texas in 2026?
Roughly $340,000, based on median single-family sale price data. Prices vary widely by city, so treat the statewide figure as a starting point rather than a quote for any specific neighborhood.
How much are property taxes on a $340,000 Texas home?
At the 1.4% effective rate, about $4,760 a year, or $397 a month before any exemptions. Your county and school district set the actual levy, so individual bills differ.
How much house can I afford in Texas?
A common rule caps housing costs near 28% of gross monthly income. Check your take-home pay with the Texas Paycheck Calculator, then test price points in the calculator above to find a payment that fits.
How do I file a Texas homestead exemption?
File once with your county appraisal district after January 1 of the year you occupy the home. It is free, it renews automatically, and it removes $100,000 from the school-taxable value.
Why are Texas property taxes so high?
Texas has no state income tax, so schools and local services are funded largely through property tax. The 1.40% effective rate is the direct tradeoff, softened by the $100,000 homestead exemption.
Related Calculators
Start with the main Mortgage Calculator to compare Texas against national figures, or see how nearby states stack up with the Oklahoma Mortgage Calculator, New Mexico Mortgage Calculator, Tennessee Mortgage Calculator. To budget the payment against real take-home pay, use the Texas Paycheck Calculator. Browse more free tools at USACalculator.
Sources: Bankrate (Redfin median single-family prices), Tax Foundation via CountryTaxCalc (effective property tax rates), Freddie Mac (30-year fixed rate). State figures: Texas median $340,000, 1.4% effective rate. Figures reviewed for 2026. This calculator provides an estimate for planning purposes and is not financial advice. Confirm program details with the state housing agency.