For a lot of people, making the move from one state to another can be exciting. But it’s also a big decision requiring loads of research. After all, the last thing you want to do is move on a whim and regret your decision.
If you’re considering moving to Texas from California, it’s important to grasp the key differences between these states, including the cost of living, job market, state tax structures, and cultural differences, to name just a few.
With that in mind, let’s dive in and explore what you need to know before moving to the Lone Star State from the Golden State.
What Are the Cost of Living Differences Between Texas and California?
California has the unfortunate reputation of being one of the costliest states in the country, second only to Hawaii. However, the cost of living in Texas is 8% lower than the national average. The savings in living costs alone could help drive your decision, but what makes Texas so much more affordable to live in?
Housing costs, in particular, could be a huge driving factor. According to Redfin, the median home price in Texas is $332,600 (Updated Jan, 2024) (as of December 2023). On the other hand, California’s median housing price is well over twice that at $738,700 (Jan 2024).
On top of that, property taxes are also lower in Texas. Yes, Texas’s effective property tax rate is higher than California‘s — 0.75% versus 1.68% — but the lower home values keep the actual tax bill significantly lower.
Pro tip: Use our well-researched guide on shopping for real estate agents in Texas.
Not planning on buying a home? You’ll also save as a renter in Texas, as the median rental cost is $1,850 per month in Texas versus nearly $2,800 per month in California.
Based on the cost-of-living index — a 100-point scale where 100 points is the average cost in the U.S. and a lower score is cheaper — essentials, such as groceries, healthcare, and transportation, are often lower across the board in Texas. Let’s look at some of the comparisons.
Cost-of-living index (Texas vs. California)
- Groceries: 94.2 versus 105
- Healthcare: 100 versus 98.3
- Utilities: 99.2 versus 133.1
- Transportation: 103.3 versus 133.1
Remember, though, these indexes look at the state as a whole. California’s cost of living often gets skewed by higher-cost areas like Los Angeles, Orange County, and San Francisco. As such, be sure to look at the specific regions where you plan to move from and where you plan to move in.
When considering the cost of living, you also want to look at your salary. As of February 2024, the average annual salary in California is $61,751, and the average hourly wage is $30 per hour. In Texas, these numbers dip to $52,532 and $25 per hour, respectively. Your situation may vary depending on the industry and your experience, but always check how far your income will go before relying on cost-of-living estimates.
How Does the Job Market in Texas Compare to California?
When considering moving to Texas from California, understanding how the job markets compare can be another big deciding factor. Even if you already have a job lined up in Texas or have remote work, you’ll still want to know about the employment landscape.
Fortunately, Texas has enjoyed strong job growth as of late. In fact, the labor market reached record highs in 2023. As of December 2023, seasonally adjusted job counts in the Lone Star State reached 14.1 million jobs, a 19,100 month-over-month growth. That made 27 straight months of growth.
Texas‘ annual employment growth rate also outpaced the national average, 2.7% versus 1.7% national average between December 2022 and 2023.
Moreover, Texas isn’t surging in a few industries. For the most part, it’s shown growth in all the major industries through 2023. The only areas shrinking were professional and business services and information, each at -0.7%.
California had a strong 2023 but nowhere near as strong as Texas, leaving some experts concerned about future outlooks. It had several outstanding months in the first half of the year, however, after that, the state added fewer than 10,000 new jobs for four months in a row. Despite this somewhat uncertain outlook, financial experts foresee continued employment growth in California despite a slew of major layoffs from tech companies.
How Do State Tax Structures Differ Between Texas and California?
A huge factor that comes into play when considering moving to Texas from California is the state tax structure. California has the highest maximum income tax rate at a whopping 12.3% on incomes of $698,272 or higher — beating the second highest (Hawaii) by over two percentage points.
Keep in mind that California has a progressive tax rate, so income tax varies from 1% to 12.3% based on nine income brackets. These brackets are as follows:
- 1%: $0 to $10,412
- 2%: $10,413 to $24,684
- 4%: $24,685 to $38,959
- 6%: $38,960 to $54,081
- 8%: $54,082 to $68,350
- 9.3%: $68,351 to $349,137
- 10.3%: $349,138 to $418,961
- 11.3%: $418,962 to $698,271
- 12.3%: $698,272 and more
Texas easily wins hands down because it has no state income tax, allowing residents to enjoy the benefits of this additional income in their wallets. But while Texas has no state income tax, it still has real estate taxes and sales taxes.
Speaking of sales tax, let’s explore how this may differ between the two states.
Texas has a state sales and use tax of 6.25%. However, cities, counties, and special-purpose districts can charge an additional 2%, bringing the maximum potential sales tax to 8.25%. California is higher yet again, with a 7.25% state sales tax and a maximum local sales tax rate of 2.5%, bringing the total maximum to 9.75%.
Remember, though, the tax rate will vary with the local sales tax, so compare your local tax rates to those in the local areas in Texas you’re considering.
What Are the Popular Texas Cities or Regions People Relocate To from California?
If you’re thinking about moving to Texas, it’s worth exploring the popular cities and regions that attract those who are relocating from California.
The Dallas-Fort Worth metropolitan area, which encompasses cities like Dallas, Plano, and Arlington, is a popular relocation spot that offers a bustling urban environment with a thriving job market. Austin, the state capital, is known for its vibrant music scene and tech industry.
Houston, the largest city in Texas, is known as the energy capital of the world and offers a diverse cultural experience.
If you’re seeking a rich history and a vibrant downtown, San Antonio might be a great spot, as it appeals to those seeking a mix of cultural heritage and modern amenities.
These cities, among others, provide a range of options depending on your desired lifestyle and career opportunities.
On top of all these great city options, those seeking a more rural experience have numerous areas to pick from, including Fredericksburg, Dripping Springs, Abilene, and more.
Pro tip: Check out these Texas neighborhood spotlights to learn more about your options in the Lone Star State.
How Do the Texas and California Education Systems Compare?
Education quality and availability are important factors for families with school-age children. Texas and California have a range of public, private, and charter schools, each with its own strengths and resources.
Overall, California does OK in education, as indicated by its 87% high-school graduation rate, which is about the national average. Texas exceeds the national average with a 90% graduation rate. In terms of college readiness, California squeezes past Texas with an average ACT score and ACT college readiness rate of 22 and 55%, respectively, compared to 20 and 27% in Texas.
Keep in mind that the stats above are statewide averages. When comparing the education systems, you can find much more insights from sources like GreatSchools.org. The non-profit site can help you research specific school districts and regions to see how potential areas in Texas compare to where you are in California.
How Does the Texan Climate Compare to California?
The climate in Texas can differ significantly from California, so you’ll want to prepare for potential weather changes. One thing to remember is California spans almost the entirety of the West Coast, meaning it has a wide range of climates.
Southern California has a more Mediterranean climate with rainy winters, dry summers, and warmer average temperatures than central and northern areas. For instance, with Los Angeles temperatures, you can expect the highest temperatures in August (84 degrees Fahrenheit) while the lowest temps arrive in December at an average of 48 degrees.
In Northern California, you experience Continental climates — it’s more arid with hot summers and cold winters. Along the coast in the north, you will also experience more rainfall than in the south. As for temperatures, you can expect average highs and lows to reach their highest in July. This month, the average high rings in at 92 degrees F and the average low is 56. The lowest temps arrive in December when Northern California’s average high drops to 56 degrees F and its low falls to 36 degrees F.
Texas is also quite large, but it doesn’t span as far north and south as California, leading to a slightly more stable climate across the bulk of the state. The coldest part of Texas is northwest — near Amarillo — but winters can still get cool in the northern areas, such as Wichita Falls and Dallas-Fort Worth. Overall, Texas winters are mild, and summers can be hot and muggy in lowland areas.
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As mentioned, the northwest is the coldest part of Texas. Here you can expect average highs to range from 52 degrees Fahrenheit in December and January to 93 degrees in July.
Northern Texas — Dallas-Fort Worth areas — enjoy average lows ranging from 42 degrees F in January to 75 degrees F in July and August. The average highs range from 62 degrees in January to a scorching 98 degrees in August.
In the coastal areas, the average lows range from 49 degrees F in January to 80 degrees in August. The highs are a bit more comfortable along the coast, ranging from 63 degrees F in January to 92 degrees in August.
South Texas — Laredo area — has some of the biggest temperature variances, with lows ranging from 47 degrees Fahrenheit in January to 77 degrees in August. The average highs in this region check in at 68 degrees in January to a sweltering 101 degrees in August.
Pro tip: Learn what temperature to set your air conditioner during the summer to get through scorching temps without sending your electricity bill soaring.
As you can see, with the wide-ranging highs and lows over the year, summers in Texas can be hot and humid while winters can bring sub-freezing temperatures. Of course, the severity of these shifts varies with the area you live in, Texas, so do your due diligence and learn all about the local climate before moving.
Is It Worth Moving From California to Texas?
Determining whether or not moving to Texas from California is worthwhile depends on your situation. On the surface, the lower cost of living, lack of state income tax, relatively mild seasons of spring and fall, and diverse culture may make the move seem like an obvious choice. But this will all depend on where you’re moving from and planning to move to.
With that in mind, you want to first find locations in Texas that interest you. Make a list of wants and needs, such as nightlife, climate, income, schooling, job market, and more. Then, run through all the numbers and details to see how it compares to where you live in California now. If the numbers check out and the other items on your checklist align, a move to Texas might be worthwhile.
Looking for a checklist? Read our moving checklist for renters.
What States Are Most Californians Moving to?
California has seen a lot of people moving out of the state lately. In fact, it was only second to New York for residents moving out of state in 2023, with 75,423 leaving the Golden State. But where are Californians escaping to?
Texas is the primary destination for Californians leaving, but they also left for Arizona, Florida, Washington, and Nevada. What do these states all have in common that’s leading Californians to them? A key factor among four of the five — Texas, Florida, Washington, and Nevada — is no state income tax.
The other factor is they all have a lower cost of living index compared to California, which has a high cost of living index of 134.50 (34.50 points higher than the national average). From highest to lowest, these state’s cost-of-living indexes are:
- Washington: 115.10
- Arizona: 107.2
- Florida: 102.3
- Nevada: 101.3
- Texas: 93
From the looks of the data, affordability is a key driver to people moving from California. Also, outside of Washington, all the top five states have relatively warm climates.
How Do I Prepare to Move From California to Texas?
Preparing for a move can be complex, but careful planning can help simplify the transition. To start, create a moving checklist that outlines must-do tasks like finding a new home or apartment, transferring utilities, notifying relevant parties of your change of address, and organizing transportation for your belongings.
Research the specific requirements and regulations for moving to Texas, such as driver’s license and vehicle registration procedures. Additionally, consider professional movers and moving companies and obtain packing supplies well in advance to ensure a smooth and efficient move.
You’ll also want to prepare for the Texas lifestyle ahead of time so you can more easily fit in with the local culture.
Moving to Texas From California Could Make Good Financial Sense
Like California, Texas is a large state with an enormous labor market and diverse industries. There are also numerous climates depending on where in the state you’re living. Whether you work remotely, have a new job, or simply want to live in a more affordable state, Texas could be a viable option. It has a significantly lower cost of living than California, which means moving to Texas from California is a potentially solid financial decision.
If you decide to make that move, one thing you’ll need to handle is setting up a new electricity provider in Texas. Just Energy can help with this, as we have numerous money-saving residential energy plans. Check out all our residential plans and choose one that fits your needs and budget before moving.
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