Median home: $335,000 | Mortgage rate: 7% | Property tax: 1.8% | Insurance: $2,100/yr
Texas is the second-largest state with no income tax but high property taxes. With a median home price of $335,000 and mortgage rates averaging 7%, understanding what you can afford before house hunting is essential.
The 28/36 rule is the gold standard: spend no more than 28% of gross income on housing and no more than 36% on total debt. In Texas, with a property tax rate of 1.8% and average insurance of $2,100/year, these costs add significantly to your monthly payment beyond just principal and interest.
A 20% down payment on the median Texas home requires $67,000. FHA loans with 3.5% down need just $11,725, but you will pay mortgage insurance. Texas homestead exemption removes $40,000 from assessed value plus limits annual increases to 10%.
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Based on the 28/36 rule, your total housing payment should not exceed 28% of gross monthly income, and total debts should stay under 36%. In Texas, with median home prices at $335,000, you typically need a household income of at least $335,000 to afford the median home.
To afford the median Texas home at $335,000 with 20% down at 7% interest, you need approximately $76,415 annual household income. This is based on the 28% housing cost guideline.
The median home price in Texas is approximately $335,000 as of 2026. Prices vary significantly by city and county. Texas is the second-largest state with no income tax but high property taxes.
A 20% down payment on the median Texas home ($335,000) is $67,000. FHA loans allow 3.5% down ($11,725) and VA loans offer 0% down for eligible veterans.
Texas has a property tax rate of 1.8%, which is above the national average. On the median home, that is $6,030/year. Texas homestead exemption removes $40,000 from assessed value plus limits annual increases to 10%.