Mcallen Texas, nestled next to the border with Mexico, is the most affordable metro area in the country.
That’s largely because of how inexpensive its housing is, with the median home sold in the city at $280,000, compared to the national median of $420,000 in August. Meanwhile the average rent for a 900-square-foot apartment in McAllen is $925 per month, according to RentCafe, far less than the national average of $1,702 per month.
And housing is one of the key factors in the Bureau of Economic Analysis’ Regional Price Parity index, which is a measure of the different prices of goods, housing and other services across the country compared to the national average. The Business Journals took that data and ranked the top 100 metro areas by size to find the most affordable cities in the country.
Those below 100 are cheaper, and those above 100 are more expensive than the national average. McAllen, Texas was 87.7 in 2021, the latest data available. Housing in McAllen, which includes rent, came in at 56.2.
The Dayton metro ranks No. 15 most affordable city to live in with a score of 92.5. Its housing index scores even lower than the national average at 73.2.
The most affordable metro areas across the country tend to be clustered in the Midwest or the South, a reflection of other reports that have largely found the same patterns repeating. Jackson, Mississippi, Chattanooga, Georgia, Knoxville, Tennessee, Toledo Ohio and Memphis are among the most affordable cities.
The most expensive metro areas are not surprising, and the top 10 include cities in California. San Francisco topped the list at 119.8, followed by San Diego, Honolulu, New York City, Seattle and Los Angeles.
More expensive cities were clustered largely in the Northeast, California alongside popular migration destinations such as Boise, Idaho and Denver, Colorado.
Here’s a look at the nation’s most affordable large metro areas, ranked by the latest regional price parity index scores, which show how costs compare in a given metro compared to the national benchmark of 100. Metros with at least 500,000 residents were analyzed for the ranking.
It’s worth noting that there was much less variation in the overall cost of goods relative to the national average. Wichita, Kansas, had the lowest score for goods, at just under 94, while its housing cost was at 69.9. Seattle had the highest score for goods, at 114.9.
But historically high inflation over the course of 2022, in which the consumer price index hit 9.1% year-over-year growth, pushed many businesses to raise their prices on everything from services to food, although that has tapered in recent months.
Andrew Latham, financial planner and director of content at Supermoney.com, said these cities are essentially where a dollar stretches the furthest — and that could make them more attractive.
He said most of the cheapest cities are in the midst and the American South, which has historically had lower housing costs and which heavily influences overall affordability. That comes with less population density and greater availability of land that ensures more supply, thus keeping prices down.
“As the world of work evolves and the ramifications of the pandemic continue to unfold, these metro areas may increasingly become hotspots for those seeking a balanced, cost-effective living experience,” Latham said.
Those looking for lower-cost options used to have to move to those areas, and the subsequent lower pay that those areas often offered, but remote work has changed the dynamic and given many workers a chance to choose, Latham said.
“Metro areas with a lower RPP index, such as those listed, stand out as attractive options. They offer more bang for the buck without compromising on key amenities and quality of life,” Latham said. “As businesses become more flexible with remote work policies, employees are more empowered to choose where they live, making these affordable metro areas viable options.”
But Latham stressed that it’s not affordability alone that determines where people move — or might want to move in the future. Those decisions include job opportunities, cultural amenities, the strength of the educational system and even healthcare availability.
The Covid-19-fueled “Great Migration” might have slowed in recent months, but people are still on the move, according to an analysis conducted by Bank of America using anonymized customer data, and those who are moving are often choosing the South while avoiding the pricier metros that topped our list.
The Sunbelt cities that saw big inflows are still seeing more people move there, while Cities that struggled with migration during the pandemic, such as San Francisco, San Jose, New York and Boston, continued to see people leave over the last year.
A separate analysis by background check and employee screening company Checkr found many of America’s “boom towns” were in the South or the West, specifically in Utah, Idaho, Florida and Texas. And some smaller towns are trying to lure high-dollar remote workers with cash and other incentives in an effort to seize the work-from-home moment and sustain new growth.