Is Colorado More Expensive Than Texas?

When considering a move or evaluating personal finances, understanding the cost of living in different regions becomes a primary concern. The comparative expense of daily life, housing, and taxes significantly impacts one’s financial well-being. Many individuals exploring relocation options often inquire about the differences in living costs between Colorado and Texas, two states known for their distinct economies, landscapes, and population growth. Analyzing broad cost of living indices and specific expenditure categories provides a clearer picture for those interested in these popular destinations.

Overall Cost of Living Comparison

Colorado generally presents a higher cost of living compared to Texas. Broad metrics indicate that Colorado’s overall cost of living surpasses Texas, standing at approximately 12% above the national average. Texas has a lower cost of living index compared to the national average. For example, one analysis suggests that Colorado is about 9.3% more expensive than Texas.

These indices commonly factor in expenses such as housing, utilities, groceries, transportation, and healthcare. While statewide averages provide a general overview, specific spending habits and individual locations within each state can lead to variations in personal costs. A city-level comparison shows Denver’s overall cost of living is approximately 1.2% less expensive than Austin’s, indicating specific metropolitan areas can deviate from statewide trends.

Housing Market Costs

Housing represents a substantial portion of living expenses and is a primary driver of cost differences between Colorado and Texas. Colorado has a higher median home value index than Texas, with home prices in the Centennial State ranging from 13% to 50% higher than in Texas. As of the second quarter of 2025, the median home price in Colorado was approximately $570,492, while in Texas, it stood at about $309,450. This considerable difference highlights Texas as a more affordable choice for potential homeowners.

Rental markets also reflect this disparity. Major metropolitan areas in Colorado, such as Denver and Boulder, have experienced significant increases in housing costs due to high demand from new residents. In contrast, cities like Dallas, Houston, and Austin in Texas offer more affordable housing options, although prices can still vary greatly within these urban centers. Factors contributing to these differences include population growth, the balance of supply and demand, and urban density. These factors influence the competitive nature of each state’s housing market.

Daily Expenses

Everyday necessities like groceries, utilities, and transportation also contribute to the overall cost of living. Grocery prices remain comparable between Colorado and Texas. An individual in Colorado can expect an average annual non-restaurant food cost of around $4,922, translating to approximately $410 per month.

Utility costs are on par with the national average in both states. Texas, however, may offer slightly lower electricity rates, partly due to its deregulated energy market. Average monthly utility expenses in Colorado are estimated to be around $296.

Transportation costs vary, with Texas’s sprawling urban centers often requiring personal vehicle use. Colorado’s major cities, like Denver, offer more public transportation alternatives, potentially reducing reliance on personal vehicles. Gasoline prices are lower in Texas; for instance, in May 2025, Texas averaged $3.23 per gallon, while Colorado averaged $3.82 per gallon. Car insurance premiums also differ, with average annual full coverage in Colorado at about $3,230 and in Texas at approximately $3,485.

Healthcare and Taxation

Healthcare costs represent another significant component of living expenses. City-specific data indicates that health-related expenses in Denver are about 17.4% less than in Austin. The average annual per-person healthcare cost in Colorado is estimated at $8,415. These costs encompass insurance premiums, co-pays for doctor visits, and prescription drug prices.

Taxation structures significantly influence the total financial burden on residents. Colorado imposes a flat individual income tax rate of 4.25% for the 2024 tax year, applicable to income reported in 2025. Texas does not levy an individual state income tax.

Property tax rates, however, present a different picture. Colorado has one of the lowest average property tax rates in the nation, around 0.49% of a home’s assessed value. Texas has a higher average property tax rate, estimated at about 1.10% for 2025.

Sales tax rates also differ: Colorado’s state sales tax is 2.9%, though combined state and local rates can average around 7.81%. Texas has a higher state sales tax of 6.25%, with combined state and local rates averaging 8.2%, and can reach up to 8.25%. These varying tax structures directly impact the overall cost of living in each state, requiring careful consideration of a resident’s income, property ownership, and consumption habits.