You definitely ought to go to UT...
1.) UT-Austin is much better academically than UH... not that UH is the worst out there, but UT is very good. Assuming you make it to graduation, a diploma from UT is much more valuable than a diploma from UH, and that's just kind of a fact of life.
2.) It's better to branch out beyond your home city; that's part of what college is all about, in my opinion...
3.) Austin is a much cooler college-town than Houston. Granted, Houston is bigger, so it kind of has more available, but Austin is well... much more "hip". Austin has one of the greatest live music scenes in the country; really great nature locations (hill country, enchanted rock); lots of students around your same age and similar interests, concentrated in a pretty small area (around UT and riverside)
and those are the main reasons I would say go to UT... plus, since you are in-state, your tuition will be around 10k per year, versus 25k per year for out-of-state students... so 10k might be more than you would pay at UH, but you will still have a huge discount and basically a fairly affordable college education.