California vs Texas: The Real Cost of Living Comparison for 2026

Texas is significantly cheaper than California on housing, income taxes, and overall cost of living — median home prices are $310,000 in Texas vs $820,000 in California, and Texas has no state income tax vs California's top rate of 13.3%. But the comparison is more nuanced than headlines suggest: California's coastal job market pays 30–50% more in tech and finance, public services are better-funded, and quality-of-life trade-offs are substantial. Whether Texas's lower cost makes you better off depends on where you work and what you earn.