While Texas used to be a top state for transplants fleeing high costs of living and northern weather, increasing numbers are leaving the Lone Star state behind just years after they moved to it.
The exodus is occurring as Texas residents see heightened property taxes, and the state that was once known for its cheap living no longer fits the bill. Just last year, about 31,000 New Yorkers moved to Texas, according to the U.S. Census Bureau.
Kim Igleheart, a 62-year-old living in Universal City, said there are many reasons people head toward Texas, and the low cost of living was certainly one of them.
“Some people are attracted to the Texas spirit of both rugged individualism and friendliness,” Igleheart told Newsweek. “Some want the urban culture. Austin was a fun town before it became a city.”
When they get there, however, transplants might be surprised to find Texas’ home insurance costs and property taxes are some of the highest in America.
California’s numbers reflect this: 107,000 Californians moved to Texas in 2021, but that number fell to about 102,000 in 2022 as property taxes kept rising. More than 494,000 people left Texas between 2021 and 2022, according to Census data.
Property taxes are high in Texas in part because the state has no personal income tax. According to local publication Kera News, property taxes make up about 50 percent of the total taxes Texans pay each year.
While the national average falls between 1.08 percent and 1.21 percent, the Texas average property tax rate is more than 1.83 percent, according to Texas tax site Tax Ease. And with a state sales tax rate of 6.25 percent, the overall state and local tax burden for Texas gets up to 7.6 percent.
The mass exit of Texans also is happening as home insurance rose an average of 10.8 percent in 2022, according to the Texas Department of Insurance, and the affordability is likely worsened by the influx of residents from states like California and New York.
Today, the prices of some homes in the Dallas-Fort Worth, Austin and Houston areas have become even less affordable based on income than living in Chicago, a new study from the National Association of Realtors and the Census Bureau said.
Median home prices in Dallas-Fort Worth have more than doubled; a decade ago eight out of 10 homes for sale in the area had prices under $300,000. That’s in stark contrast to 2022, when about 80 percent of homes were more expensive than that.
On a Reddit thread over the summer, many Texans voiced frustrations with the continuously growing costs of living in the state, among other issues.
“Lifelong Texan here. I am definitely preparing an exit strategy,” one user wrote. “From the heat to the stripping away of human rights, I’m just done.”
Another Redditor echoed the sentiment: “I’ve been in Texas most of my life, and my husband and I were always planning on retiring here [in about 5 years from now],” they said. “But between this intense heat, crazy politics, and cost of living, we’ve decided to leave for good and head to Knoxville.”
While Igleheart acknowledged Texas’ property taxes were “crazy,” she said she was lucky to be one of few who has frozen taxes because she is disabled. For others looking to move, however, she said they need to factor in all costs before making that major life decision.
“So long as the housing demand surpasses supply, nationwide, there are no short-term solutions,” she said. “While Texas property taxes are high, there is no state income tax. It’s a trade-off.”
Joseph Gutheinz, an attorney at the Pearland, Texas-based Gutheinz Law Firm, still believes Texas is the best state to work and live in. Compared to East and West Coast standards, Gutheinz said middle class Texans live like “upper class citizens” in other cities and still have relatively cheap home and utility bills.
“I used to live in California and convinced my sisters to flee California for Texas, which is a truly wonderful state,” Gutheinz told Newsweek. “In California, lower-class citizens are homeless and live in tent cities. I’ve seen them, and in New York City, people live in apartments the size of Texas closets.”
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.