Home Affordability in Austin, TX
No state income tax and no transfer tax — but property tax among the highest in the country, and prices still well below the 2022 peak.
Quick answer
On a $435,000 home in Austin with 20% down, expect all-in monthly housing costs (mortgage, property tax, insurance, maintenance) of roughly $3,500/month — and about $107,200 in total cash to close and move in.
Example scenario at a 6.65% 30-year fixed rate. Illustrative only — run your own numbers below.
The Austin market right now
Austin is one of the few large U.S. metros where a buyer today pays less than a buyer did four years ago. The metro median sits around $435,000 as of July 2026 — up about 1% year over year, but roughly a quarter below the May 2022 peak. Inside the Austin city limits the median is closer to $577,000 and drifting slightly down (-1.4% year over year). That gap is the single most useful number for a buyer to internalize: the difference between "Austin" and "the Austin area" is more than $140,000, and it is the main lever most buyers have.
What it actually costs to buy in Austin
Most affordability calculators stop at the mortgage payment. That leaves out the two lines that decide whether a purchase is comfortable or tight: property tax and, below 20% down, PMI. Here is the full picture on a $435,000 home with 20% down at 6.65%:
| Cost | Monthly |
|---|---|
| Mortgage principal & interest | $2,234 |
| Property tax (1.85%) | $671 |
| Homeowners insurance | $233 |
| Maintenance reserve | $363 |
| Total | $3,500 |
That property tax line is the one people underestimate. At 1.85%, Austin's effective rate is close to double the national average — a direct consequence of Texas funding schools and local government without a state income tax. If you are moving from a state with lower property tax and counted "no income tax" as pure savings, run the property tax line before anything else. It is often most of the offset. Worth noting that Austin is not even the steepest in its own state: Houston and Dallas both run higher.
Transfer tax and the long-run trade
Texas charges zero transfer tax on a home sale — unlike California (about 0.11%) or New York (0.4%, before NYC's own mansion tax). That saves an Austin buyer real money at closing. But it is a one-time saving, while the 1.85% property tax bill repeats every year you own the home. Over a 10-year hold the property tax difference dwarfs the transfer tax savings.
Two down payment scenarios
Putting down less than 20% brings private mortgage insurance into the picture — priced by how much you put down, not a flat rate. On the same $435,000 home:
| 20% down | 10% down | |
|---|---|---|
| Down payment | $87,000 | $43,500 |
| Loan amount | $348,000 | $391,500 |
| Monthly P&I | $2,234 | $2,513 |
| Monthly PMI | $0 | $179 |
| Total monthly housing | $3,500 | $3,959 |
The $43,500 you keep by putting down 10% instead of 20% carries a real recurring cost — about $179/month in PMI on top of a larger loan balance, until the balance falls to 80% of the original purchase price. Whether that trade is worth it depends on what else that cash could do for you: emergency reserves, invested elsewhere, or simply not being spent. That is the kind of trade-off a static calculator cannot weigh but a full 30-year projection can.
Cash needed to close
Beyond the down payment, budget for closing costs, prepaids, and move-in costs:
| Closing costs | $7,250 |
| Prepaids (interest, insurance, tax escrow) | $6,230 |
| Move-in costs | $6,756 |
| Down payment | $87,000 |
| Total cash to close | $107,236 |
What income do you need?
There is no single answer, but there is a useful threshold. Viso starts flagging a purchase as tight once housing — mortgage, property tax, insurance, and PMI, excluding maintenance — passes about 42% of take-home pay. On the 20%-down scenario above, housing runs $3,138/month, which implies take-home of roughly $7,500/month to stay under that line.
We deliberately do not translate that into a gross salary. The gap between gross and take-home swings widely with filing status, retirement contributions, equity compensation, and — a large factor that varies entirely by state — whether you owe state income tax at all. Put your actual income and location into the planner and it will do the conversion properly.
Is 3.5% appreciation realistic for Austin?
We use 3.5%/year as a starting assumption for Austin, roughly in line with long-run national averages. Treat it with more suspicion here than almost anywhere else: Austin ran far above that through 2021–2022 and has spent the years since giving much of it back, so a smooth 3.5% line describes no period this market has actually lived through. It is a neutral starting point, not a forecast — and it is the first number worth stress-testing in the planner. Dropping it to 1–2% is what tells you whether a purchase still works if the recovery stays slow.
FAQ
- What is the median home price in Austin right now?
- About $435,000 across the Austin metro as of July 2026, per Unlock MLS and the Austin Board of Realtors — up roughly 1% year over year. Inside the Austin city limits the median is higher, around $577,000, and down about 1.4% year over year. Both remain well below the May 2022 peak.
- Are Austin home prices still falling?
- Broadly, no — they have flattened. The metro median is up about 1% year over year as of July 2026 after a multi-year decline from the 2022 peak, with sales volume up over 4%. City-limits prices are still drifting slightly lower. The sharp correction is over; the recovery is slow.
- Does Texas really have no transfer tax?
- Yes — Texas is one of a handful of states that charges no real estate transfer tax at all. You will still pay title insurance, escrow, and lender fees like anywhere else.
- Why is Austin's property tax so high?
- Texas has no state income tax, so property tax carries far more of the load for schools and local services than it does in most states. That is a structural feature of how Texas funds government, not a reaction to recent price moves — Austin-area effective rates sit near 1.85%, close to double the national average, and Houston and Dallas run higher still.
- When does PMI go away in Austin?
- The rule is the same everywhere: PMI drops once your loan balance reaches 80% of the original purchase price. Appreciation does not speed this up, because the threshold is based on your original loan, not current value.
- Is 20% down actually necessary in Austin?
- No. Plenty of buyers put down less and pay PMI as the trade-off for keeping more cash in reserve. The right call depends on your full financial picture, not a fixed rule.
Run your own Austin numbers
Change the price, down payment, income, and rate — and see the full 30-year picture, not just a monthly payment. Free, no account needed.
Start planning →Rate assumption: 6.65% (Freddie Mac PMMS 30-year fixed, as of 2026-08-20). Median price: Unlock MLS / Austin Board of Realtors, Central Texas Housing Report, July 2026.