Replacing a furnace is also the moment to ask whether you want another furnace at all. There are three honest answers. A new gas furnace burns fuel to make heat and is measured by AFUE (80% to 98.5%); it delivers hot, fast heat and is hard to beat where winters are severe or gas is cheap. A heat pump doesn't burn anything — it moves heat from outside air into the house — and is usually 250% to 350% efficient (a COP around 2.5 to 3.5), because it delivers more heat energy than the electricity it uses. It also air-conditions in summer from the same box.
The third answer, dual-fuel (or hybrid), keeps both: a heat pump does the efficient work in mild weather and a gas furnace takes over below a balance point on the coldest days. In much of the South — including most of Texas — a heat pump or dual-fuel system is a strong fit because winters are short and mild, which is exactly where a heat pump's efficiency shines and a condensing furnace pays back slowest.
The decision is genuinely local and comes down to numbers, not ideology: your electricity price versus your gas price, your winter design temperature, whether you already have gas service, and what your existing ductwork can handle. One 2026 note keeps the math honest — the federal Section 25C credit that used to pay up to $2,000 toward a qualifying heat pump expired for systems placed in service after December 31, 2025, so don't build a heat-pump budget around a credit that is no longer there. A good contractor will quote both a furnace and a heat-pump option and show you the operating-cost difference for your home.