## McAllen, Texas, Claims Title of Most Affordable City in America: Housing Costs Drive Rankings
Looking for a place where your budget stretches further? McAllen, Texas, has emerged as the most affordable city in the United States, according to a recent analysis by Realtor.com, citing data from the Bureau of Economic Analysis (BEA).
Residents in McAllen pay just $86.92 for goods and services that cost $100 on average across the nation. This remarkable affordability is driven primarily by the city’s relatively low housing costs.
John Macke, senior research analyst at John Burns Research and Consulting, explains, “Looking at the BEA’s regional price parity data specifically, it’s the housing component that is much lower in these metros relative to others, making it the primary factor driving the lower cost of living.”
Texas Dominates Affordability Rankings:
The South and Midwest regions dominate the affordability rankings, with Texas securing two spots among the top 10 most budget-friendly metropolitan areas. McAllen’s affordability is attributed to several factors, including its trade-based economy fueled by its location near the Mexico border, creating a hub for manufacturing jobs and attracting businesses.
The lack of state income tax in Texas further enhances the city’s financial appeal. Real estate agent Cara Ameer highlights another key factor: “There is plenty of land on which to develop, which helps keep prices more affordable.” This abundance of land allows for continued growth without the pressure of limited space driving up prices.
A Look at McAllen’s Housing Market:
McAllen’s median home price of $275,000 underscores its affordability advantage. Nationally, the home price-to-income ratio sits around 5.5 as of August 2024, indicating that home prices are roughly 5.5 times the median household income. However, in a city like McAllen, this ratio drops to 4.8, demonstrating the significant difference in home price affordability relative to incomes.
Other Affordable Cities on the Rise:
Wichita, Kansas, takes second place in the affordability rankings, followed closely by Little Rock, Arkansas, in third place. These cities are attracting residents from higher-cost states who are seeking a more affordable lifestyle, particularly those from California drawn to Arkansas’s milder climate and abundance of recreational opportunities.
Here are some other standout cities highlighted by Realtor.com for their affordability:
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Toledo, Ohio ($90.18):
Known as the “Glass Capital of the World,” Toledo boasts particularly affordable transportation costs.*
Scranton, Pennsylvania ($91.90):
This city offers significantly lower property taxes compared to Philadelphia suburbs.*
Dayton, Ohio ($91.39):
Dayton benefits from a diverse economy without the tech-driven cost inflation seen in some other metropolitan areas.*
Tulsa, Oklahoma ($90.53):
This city combines cultural amenities with the affordability characteristic of the Midwest.*
Akron, Ohio ($92.05):
Akron offers attractive property tax abatement programs to further enhance affordability.*
Birmingham, Alabama ($91.15):
Birmingham provides access to major healthcare facilities while maintaining affordability.*
El Paso, Texas ($91.21):
Despite Texas’s growing popularity, El Paso continues to maintain affordability, though some experts believe this advantage may fade as mortgage rates stabilize.Conclusion:
The most affordable cities in the United States are largely concentrated in the South and Midwest, with smaller cities dominating the list. These areas offer lower housing costs, often $100,000 or more below the national median, and other factors contributing to affordability. While these cities present attractive opportunities for budget-conscious individuals and families, it’s important to consider potential changes in housing market dynamics that may affect affordability in the future.