Though nationwide inflation remained elevated in 2025, Dallasites may have felt a little less squeezed by the end.
According to a study from Smartasset, a maker of online financial tools, the cost of living in Dallas dropped last year.
Cost of living is a measure that reflects the price of housing, groceries, utilities, transportation, and other necessities. Using data from The Council for Community and Economic Research and the U.S. Bureau of Labor Statistics, Smartasset found that it got 0.83% cheaper to live in Dallas year over year.
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Of the 236 cities evaluated, Dallas was one of just 40 whose cost of living dropped in 2025. Dallas’ cost of living was also 1.5% lower than the national average.
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Other cities in the Dallas-Fort Worth area were also included in the study. Arlington saw the steepest rise of local cities, with its cost of living increasing more than 4%. Cost of living also increased in Fort Worth and Plano, while it decreased in Denton. Dallas was also the only one of Texas’ five largest cities to see its costs decrease.
There are several possible reasons for Dallas’ cost of living decline. Leading up to 2025, income growth outpaced housing cost growth after the inverse occurred in 2022 and 2023. Then, D-FW’s median rent dropped 2.5% from January 2025 to January 2026.
Inflation was also much cooler in D-FW than the rest of the country in parts of 2025, with grocery prices increasing only moderately compared to the wider U.S., and clothing costs falling over the course of the year.
Meanwhile, another Smartasset study found the effective purchasing power of a $100,000 salary grew from 2024 to 2025, though it was still lower than Texas’ other major metros.
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