Austin has earned a top spot on a new list of the most affordable places to live, ranking No. 5 based on its relative cost of living and high median household income.
The report by personal finance experts Motley Fool Money, "The 10 Most Affordable Cities With High Salaries and Low Costs of Living," compared hundreds of U.S. cities based on their income-to-expense ratio, where a higher ratio means better affordability. Median income was sourced from U.S. Census data, while cost of living was taken from a 2024 cost of living index from the Council for Community and Economic Research.
The North Dallas suburb of McKinney had the highest income-to-expense ratio (1.55) out of every U.S. city on the list, thus claiming the No. 1 spot as the most affordable place to live. According to the report's analysts, McKinney's cost of living index is three points below the national average.
Austin earned fifth place with an estimated income-to-expense ratio of 1.29. Austinites make a median household income of $91,501 a year, which is enough to cover the report's estimate of $70,997 for the city's cost of living.
Motley Fool Money says Austin is alluring for not just newcomers, but for those who have lived in the city for a while and want to settle down permanently.
"Despite the city's impressive growth, the cost of housing is only four points above the national benchmark, while costs in every other major category are below average, according to the Council for Economic and Community Research," the report says. "Affordability plus a strong and diverse economy and vibrant culture makes Austin a top destination to put roots down in."
Affordable cities in North Texas
Plano, another Dallas suburb, also earned a spot in the top 10 most affordable places to live, coming in at No. 6 with an income-to-expense ratio of 1.28.
The findings show Plano households make about $108,594 in median annual income to offset an $84,931 cost of living estimate. No wonder residents are happier here than in any other city in Texas.
Plano's economy is the strongest factor attracting people to this popular suburb, as well as greater Dallas-Fort Worth's entrepreneurial spirit.
"Toyota Motor North America has its headquarters in Plano, and other large companies have significant footprints there including JPMorgan, JCPenney, and Frito-Lay," the report said.
Though Austin, McKinney, and Plano ranked on the list of the most affordable cities to live, neither appeared in Motley Fool Money's separate ranking of the cheapest places to live, which considers only the cost of living and doesn't factor in how much people earn. Earning the No. 1 spot in that category was Decatur, Illinois.
The only Texas cities to rank on the list of the cheapest places to live were the Rio Grande Valley cities of Edinburg (No. 3) and Harlingen (No. 6), as well as Amarillo (No. 10) in West Texas.
The top 10 most affordable places to live in the U.S. are:
- No. 1 – McKinney, Texas
- No. 2 – Morristown, New Jersey
- No. 3 – Edmond, Oklahoma
- No. 4 – Midland, Texas
- No. 5 – Austin, Texas
- No. 6 – Plano, Texas
- No. 7 – Joliet, Illinois
- No. 8 – Kansas City metropolitan area
- No. 9 – Atlanta, Georgia
- No. 10 – Charleston, South Carolina
