As the cost of living continues to rise across the United States, many people are looking to relocate to more affordable cities. Two popular destinations that often come up in relocation discussions are Dallas, Texas and Sacramento, California. Both offer warm weather and vibrant cultures, but which city offers a lower cost of living? Let’s take a deep dive into the data to find out if Dallas is cheaper than Sacramento.
Housing is typically the largest monthly expense for households, so it’s a major factor to consider when comparing cost of living between cities. According to data from the Council for Community and Economic Research, housing costs in Dallas are significantly lower than in Sacramento.
The average rent for a 1-bedroom apartment in Dallas is $1,190 per month, compared to $1,559 in Sacramento. Renting a 2-bedroom apartment averages $1,427 in Dallas versus $1,902 in Sacramento. The gap widens even more when looking at median home prices. The median value of owner-occupied homes in Dallas is $215,600 while in Sacramento it’s $385,200.
To visualize the difference in rents between the two cities:
|1 Bedroom Rent
|2 Bedroom Rent
Clearly housing expenses are substantially lower in Dallas compared to Sacramento at all levels. Whether renting or buying, you’ll get more home for your money in Dallas.
Utility costs are another essential living expense to factor when comparing cost of living. This includes things like electricity, natural gas, water, garbage collection, and more.
According to data from Numbeo, utility costs are a bit lower in Dallas than Sacramento. Numbeo estimates typical monthly utility costs for a 915 square foot (85 square meter) apartment at around $130 in Dallas, compared to $140 in Sacramento. Part of this difference is likely due to Dallas’s lower electricity rates, averaging 10.7 cents per kWh versus Sacramento’s 19.2 cents per kWh.
While the monthly savings aren’t massive, lower utility bills contribute to Dallas’s overall advantage in cost of living.
Everyone has to eat, so grocery costs make up a significant portion of monthly budgets. Not surprisingly, data from Numbeo shows that grocery and food prices are cheaper in Dallas than Sacramento.
A typical monthly grocery bill for a family of four comes out to about $550 in Dallas, versus approximately $770 in Sacramento. When looking at prices of specific food items like bread, eggs, cheese, chicken, and fruits and vegetables, Dallas consistently offers savings of 10-20% or more compared to Sacramento.
Here is a comparison of select grocery item prices in the two cities:
|Bread, 1 lb
|Eggs, 12 count
|Milk, 1 gallon
|Chicken Breast, 1 lb
|Apples, 1 lb
Saving nearly $220 per month on groceries goes a long way towards a lower cost of living. Dallas wins this category clearly.
Transportation costs are another key factor in cost of living comparisons. This includes expenses like public transportation fares, as well as costs for owning and operating a personal vehicle.
Public transportation is much more robust in Sacramento compared to Dallas. Sacramento residents can access buses, light rail, and Amtrak. Fares run from $2.50 for a single bus trip up to $135 for a monthly light rail pass. Dallas’s public transit options are more limited, with a bus system and the Trinity Railway Express commuter train to Ft. Worth. Fares range from $1.75 per bus ride to $80 for a monthly pass.
While Sacramento’s public transit is better, costs are lower in Dallas. Owning and operating a car is also less expensive in Dallas. Estimates put the average monthly cost of gas, insurance, maintenance and parking at around $440 in Dallas versus $460 in Sacramento.
Overall transportation costs come out lower in Dallas, though Sacramento residents who regularly use public transit may save substantially compared to driving.
Another vital component of cost of living is access to affordable healthcare. Comparing average costs in Dallas and Sacramento is difficult due to wide variations in health insurance coverage. However, there are some useful metrics that provide a sense of relative healthcare costs.
According to the federal government’s Medicare pricing data, the average cost of an office visit to a general practitioner is 5% lower in Dallas at $77, versus $81 in Sacramento. The average cost of a dental cleaning is identical in both cities at $124.
Data from Kaiser Family Foundation shows the premium for an employer-provided health plan is 5% lower in Dallas, at $6,722 per year for an individual, compared to $7,088 in Sacramento. The total healthcare price level index compiled by the Council for Community and Economic Research is also lower in Dallas by 2.8%.
While the differences are not enormous, the available data points to slightly lower healthcare costs in Dallas.
Taxes take a significant bite out of many household budgets, so examining the differences in tax rates between cities provides important cost of living insights. Both Dallas and Sacramento have federal and state income taxes, however, property tax and sales tax rates differ significantly.
The effective property tax rate averages 2.18% in Dallas compared to just 1.1% in Sacramento. For a household with a $250,000 home, they would pay $5,450 per year in property taxes in Dallas versus $2,750 for the same priced house in Sacramento.
Sales tax rates also favor Sacramento. The sales tax in the city of Sacramento is 8.75%, while the rate in Dallas is 8.25%. Higher property tax costs erase the savings Dallas residents see from lower sales taxes.
Overall state and local taxes are lower in Sacramento thanks to the huge difference in property tax rates. However, Texas residents benefit from no state income tax while Californians pay some of the highest state income taxes in the U.S.
Cost of Living Indices
Comparing individual living costs provides helpful insights, but cost of living indices distill these data points into single numbers that represent overall affordability. The most widely followed indices come from The Council for Community and Economic Research (C2ER) and Sperling’s Best Places.
C2ER’s overall cost of living index rates Dallas at 95.2 and Sacramento at 109.7, with 100 representing the national average. This means Sacramento’s cost of living is 15% higher than the national average, while Dallas comes in 5% below average.
Sperling’s Best Places cost of living index similarly puts Dallas at 96 and Sacramento at 124. Both indices agree, Sacramento’s cost of living is approximately 25-30% higher compared to Dallas when considering the total package of living expenses.
Cost of Living Index Comparison
Opportunities for Savings in Dallas
The data makes it clear that Dallas offers a lower overall cost of living compared to Sacramento. Housing, groceries, utilities and other living expenses are less expensive in Dallas. Significant savings can be found across all household budgets.
Some of the biggest opportunities for cost savings in Dallas include:
- Housing – Home purchase prices and rents around 30% lower than Sacramento
- Groceries – At least $200 per month savings on food costs for a family
- Utilities – Electricity rates 40% lower in Dallas
- Healthcare – Slightly lower healthcare costs and insurance premiums
Residents who own a home, drive a car, and pay utilities in Dallas stand to save thousands of dollars per year compared to living in Sacramento. Even renters can save several hundred dollars per month.
After looking at the key living expenses, it’s definitive that Dallas offers a significantly lower cost of living compared to Sacramento. Dallas ranks below national averages on total cost of living indices, while Sacramento comes in well above average.
If affordable living is a priority, Dallas emerges as the cheaper option of the two cities. Lower housing prices, groceries and utilities offset the savings Sacramento residents see on taxes.
The magnitude of savings will depend on your lifestyle and housing choices, but Dallas provides a great opportunity to stretch your budget further. The city offers abundant amenities, job opportunities, dining and entertainment options at an attractive price point.
While Sacramento remains a wonderful city to call home, the data makes it clear that Dallas wins out as the more cost-friendly option by a significant margin.