The 10 Most Affordable Cities With High Salaries and Low Costs of Living | The Motley Fool (2024)

Average salaries and costs of living vary wildly across the United States. The most affordable cities hit the sweet spot by having comparatively high salaries combined with a low cost of living.

That's a big financial benefit for residents, and it makes cities like these popular places to live. Read on to learn about the 10 most affordable cities in the United States, as well as the cheapest and most expensive cities overall.

The 10 most affordable places to live in the United States

To rank the most affordable places to live, The Ascent compared median household income to cost-of-living data in hundreds of cities. A higher estimated income-to-expense ratio indicates more affordability.

Each city's cost-of-living index from the Council for Community and Economic Research was multiplied by median household expenditures nationwide to calculate a cost-of- living estimate.

Each city's median household income was then divided by its cost-of-living estimate to calculate an estimated income-to-expense ratio. The higher a city's income-to-expense ratio, the more its median income exceeds its cost-of-living estimate. That means a higher score indicates more affordability.

Here are more details on the most affordable places to live in the United States.

1. Cedar Park, Texas

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• Estimated income-to-expense ratio: 1.401
• Cost-of-living index: 92.3
• Cost-of-living estimate: $61,774
• Median household income: $86,530
• Median home price: $478,900 (for the Austin-Round Rock, Texas metro area)
• Population: 78,693
• Unemployment rate: 3.6%

With a reasonable cost of living and high wages, Cedar Park is our No. 1 most affordable place in the United States. The median age in Cedar Park is 35.4, and education levels are high here, as over half the population has a college degree. It also has quality public schools, making this suburb of Austin one of the top affordable cities to raise a family.

Cedar Park's cost of living is 7.7% below the national average, and its median income is an impressive 22.2% above the national median. Groceries are especially cheap in Cedar Park compared to average monthly expenses nationwide, costing 15.0% less than the national average.

The unemployment rate for Cedar Park is 3.6%, close to the national rate of 3.5%. Cedar Park's biggest industries, in terms of number of workers, are:

• Professional, scientific, and technical services
• Retail trade
• Healthcare and social assistance

2. Hastings, Nebraska

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• Estimated income-to-expense ratio: 1.342
• Cost-of-living index: 91.6
• Cost-of-living estimate: $61,306
• Median household income: $82,258
• Median home price: $270,000 (for Lincoln, NE)
• Population: 25,037
• Unemployment rate: 2.1%

Hastings has a cost of living 8.4% below the national average, and it offers affordable housing, in particular. Housing costs are 14.3% below the national average, and the median home price in the Lincoln area is well below the nationwide median.

This city is on the small side, making it most suited for those who want a quiet way of life. The median age in Hastings is 36. Despite its size, Hastings pairs that low cost of living with a robust job market. Its unemployment rate of 2.1% is the lowest on this list by a wide margin, and the median salary is 16.2% higher than the national median. The biggest industries in Hastings are:

• Healthcare and social assistance
• Manufacturing
• Retail

3. St. Paul, Minnesota

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• Estimated income-to-expense ratio: 1.339
• Cost-of-living index: 97.6
• Cost-of-living estimate: $65,322
• Median household income: $87,433
• Median home price: $365,600 (for the Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin metro area)
• Population: 307,193
• Unemployment rate: 3.0%

St. Paul scores well for affordability primarily because of its wages, which are high compared to the average U.S. income. The median household income here is 23.5% more than the national median, and the unemployment rate is 0.5% below the national rate.

The cost of living in St. Paul is 2.4% below the national average, but it stands out in a few key areas. Notably, housing costs in St. Paul are 9.9% lower than the national average, and grocery costs are 7.3% lower.

St. Paul has lots of quality dining and nightlife options, and since it also has high wages, it's a fantastic city for young professionals. The median age of 32.5 reflects that. As far as career options go, the top three industries in St. Paul are:

• Healthcare and social assistance
• Educational services
• Manufacturing

4. San Marcos, Texas

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• Estimated income-to-expense ratio: 1.338
• Cost-of-living index: 96.6
• Cost-of-living estimate: $64,652
• Median household income: $86,530
• Median home price: $478,900 (for the Austin-Round Rock, Texas metro area)
• Population: 68,580
• Unemployment rate: 4.3%

San Marcos is a suburb of Austin, and it's an exciting option for young adults. The median age is just 25.1, by far the lowest of any city on this list. Even though the workforce is younger, salaries are high at 22.2% above the national median. However, the unemployment rate is also somewhat high at 4.3%.

Residents don't need to spend too much on groceries, which are 14.2% cheaper than the national average. On other expenses, San Marcos is close to the national average, and its overall cost of living is 3.4% lower. The largest industries are:

• Accommodation and food services
• Retail trade
• Educational services

5. Midland, Texas

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• Estimated income-to-expense ratio: 1.327
• Cost-of-living index: 90.6
• Cost-of-living estimate: $60,637
• Median household income: $80,478
• Median home price: $345,900
• Population: 131,325
• Unemployment rate: 3.0%

If you're looking for a reasonably sized city with low living costs, Midland is a great choice. Its cost of living is 9.4% less than the national average. Housing is the area where Midland residents save the most, with these costs beating national average housing prices by 22.9%. The city has a balance of families and young professionals, with a median age of 31.4.

Midland doesn't have the highest household income on this list, but it still tops the national median by 13.7%. Unemployment is low, in large part because it's one of the country's major oil producers. Midland's biggest industries are:

• Mining, quarrying, oil, and gas extraction
• Retail trade
• Healthcare and social assistance

6. Raleigh, North Carolina

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• Estimated income-to-expense ratio: 1.326
• Cost-of-living index: 96.1
• Cost-of-living estimate: $64,318
• Median household income: $85,303
• Median home price: $431,000
• Population: 469,124
• Unemployment rate: 3.1%

Out of the 10 most affordable cities, Raleigh is the largest, and it boasts a median income 20.5% higher than the national median. It's fairly easy on the wallet, with a cost of living 3.9% below the national average. Grocery costs are 8.4% less than the national average, and housing is 2.5% less, which isn't bad for a city with nearly half a million people.

There's lots to do in Raleigh, starting with its ample number of free museums, leading to its nickname "Smithsonian of the South." It also has plenty of nearby parks and nature reserves, making it fun for families and outdoorsy young adults. It has a solid mix of those two groups, with a median age of 34.0.

Raleigh also has a low unemployment rate of 3.1%. Although there are several major industries here, the ones with the most employees are:

• Professional, scientific, and technical services
• Healthcare and social assistance
• Retail trade

7. Minneapolis, Minnesota

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• Estimated income-to-expense ratio: 1.321
• Cost-of-living index: 98.9
• Cost-of-living estimate: $66,192
• Median household income: $87,433
• Median home price: $365,600 (for the Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin metro area)
• Population: 425,336
• Unemployment rate: 2.8%

Minneapolis is less than a 30-minute drive from neighboring St. Paul, and these two affordable cities share many of the same benefits. The typical household here makes 23.5% more than the national median, and there are quite a few bars and restaurants, so it's a fun place to live for young professionals. The median age in Minneapolis is 32.3.

Although wages are high, the cost of living in St. Paul is about average. It's just 1.1% less than the national average, but its housing costs are 8.4% lower. Minneapolis also has a low unemployment rate of 2.8%, well below the national rate of 3.5%. Its largest industries are:

• Healthcare and social assistance
• Educational services
• Professional, scientific, and technical services

8. Vineland, New Jersey

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• Estimated income-to-expense ratio: 1.319
• Cost-of-living index: 95.6
• Cost-of-living estimate: $63,983
• Median household income: $84,409
• Median home price: $538,500 (for the Newark, New Jersey-Pennsylvania metro area)
• Population: 61,156
• Unemployment rate: 6.4% (for the Vineland-Bridgeton, New Jersey metro area)

Vineland scores well for affordability, even though it is a bit of a mixed bag in this regard. Some costs are well below the national average, including housing (11.7%) and healthcare (8.9%). Others are more expensive than average, most notably utilities (7.6%) and groceries (3.7%). It comes out to an overall cost of living 4.4% below the national average.

Salary-wise, the median household income in Vineland is 19.2% above the national median. But the unemployment rate, at least for the Vineland-Bridgeton metro area, is high at 6.4%. Its median age is also higher than other cities on this list, at 37.8. This city's major industries are:

• Healthcare and social assistance
• Retail trade
• Manufacturing

9. Ardmore, Oklahoma

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• Estimated income-to-expense ratio: 1.313
• Cost-of-living index: 84.6
• Cost-of-living estimate: $56,621
• Median household income: $74,331
• Median home price: $189,000
• Population: 24,893
• Unemployment rate: 3.6%

The smallest city on this list, Ardmore is affordable mostly because of a cheap cost of living (15.4% below the national average). Housing is very inexpensive here, beating the national average by 37.3%. Its population skews older, with a median age of 37.4, and it's considered a good town to retire.

Earnings are slightly higher than the national median, topping that by 5.0%. The unemployment rate of 3.6% is near the national rate. Ardmore's biggest industries are:

• Healthcare and social assistance
• Retail trade
• Manufacturing

10. Douglasville-Douglas County, Georgia

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• Estimated income-to-expense ratio: 1.290
• Cost-of-living index: 89.9
• Cost-of-living estimate: $60,168
• Median household income: $77,589
• Median home price: $330,000
• Population: 35,561
• Unemployment rate: 4.0%

Rounding out the top 10 is Douglasville, with above-average wages and low cost of living having about an equal impact. The median household income is 9.6% above the national median, the median age is 36.7, and the cost of living is 10.1% less than the national average.

The cost of living is mostly due to low utility and housing costs, which come in at 17.9% and 17.3% less than average, respectively. Unemployment in this city is somewhat higher than the national average, and its largest industries are:

• Healthcare and social assistance
• Retail trade
• Educational services

Cheapest and most expensive cities in the United States

Harlingen, Texas is the cheapest city in the United States, with a cost-of-living index of 77.1, according to the Council for Community and Economic Research. Manhattan is the most expensive at 228.0. A cost-of-living index of 100 represents the nationwide average. That means Harlingen is 22.9% less expensive than average, and Manhattan is 128% more expensive.

The tables below have the 10 cheapest and most expensive cities in the United States. Keep in mind that the list of the cheapest cities is based only on cost of living. It doesn't measure affordability, since that's determined using the median household income in each city relative to the cost of living there. These low-cost-of-living cities could be good places to retire, though, since an area's average income isn't that important to retirees.

Cheapest cities in the United states

Methodology

Each city's cost-of-living index was taken from the Council for Community and Economic Research's 2022 annual average cost-of-living index report.

The estimated cost of living in each city is calculated by multiplying the city's cost-of-living index score by the median annual household expenditure across the United States. This number is an estimate of median expenditures per household in the city. Household expenditure data is from the 2021 Consumer Expenditure survey.

The estimated income-to-expense ratio is calculated by dividing the median household income in the city by the cost-of-living estimate for the city. A higher estimated income-to-expense ratio score means the city is more affordable as the median household income there is above the cost-of-living estimate. Income data is from the 2021 American Community Survey.

Sources

• Council for Community and Economic Research (2023). "2022 Annual Average Cost of Living Index Report."
• Data USA (2023). Various city pages.
• National Association of Realtors. "Metropolitan Statistical Areas Q4 2022."
• Realtor.com. Various city pages.
• U.S. Bureau of Labor Statistics. "Civilian Unemployment Rate."
• U.S. Bureau of Labor Statistics. "Consumer Expenditure Survey."
• U.S. Bureau of Labor Statistics. "Local Area Unemployment Statistics."
• U.S. Census Bureau. "American Community Survey."
• U.S. Census Bureau. "Income in the United States: 2021."
• World Population Review (2023). Various city pages.