Cities with lowest cost of living identified by new study

Americans are facing financial challenges as the cost of living continues to rise across various sectors, including housing, utilities, and groceries. However, there are cities where the cost of living is significantly lower, offering residents more value for their money.

Research conducted by Realtor.com's economic team analyzed regional price parities (RPPs) data from the Bureau of Economic Analysis to identify cities with the lowest cost of living. McAllen, Texas tops this list with an RPP of 86.92%, meaning that what costs $100 nationally would only cost $86.92 in McAllen.

"The metros with the lowest cost of living are largely concentrated in the South and the Midwest," states Hannah Jones, a senior economic research analyst at Realtor.com. She adds that these areas tend to be smaller cities.

John Macke from John Burns Research and Consulting highlights affordable housing as a key factor influencing these findings. "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," he explains.

McAllen's low housing costs contribute significantly to its affordability. "Nationally, the home price-to-income ratio is around 5.5 as of August 2024," says Macke. In McAllen, this ratio is 4.8 due to lower home prices relative to incomes.

Real estate agent Cara Ameer notes McAllen's proximity to Mexico has bolstered its trade-based economy and manufacturing jobs while benefiting from no state income tax and lower property taxes in Texas.

Other cities on this list include Wichita, Kansas; Little Rock, Arkansas; Toledo, Ohio; Scranton, Pennsylvania; Dayton, Ohio; Tulsa, Oklahoma; Akron, Ohio; Birmingham, Alabama; and El Paso, Texas—each offering unique advantages alongside their affordability.

In Wichita and Little Rock residents pay approximately $89 for necessities worth $100 elsewhere. Toledo offers inexpensive transportation options while Scranton benefits from low property taxes compared to Philadelphia suburbs.

Dayton maintains a diversified economy without high-tech industry booms affecting living costs negatively while Tulsa boasts cultural richness at reduced expenses compared to major urban centers like New York City.

Akron's agricultural connections keep food prices low alongside residential tax abatements promoting affordable housing developments within city limits despite limited high-end properties available overall market-wise statewide regionally speaking according real estate investor Jessica Lauren based Columbus nearby capital statehouse government offices headquarters many businesses alike throughout area surrounding regions involved therein further afield beyond borders outside perimeters general vicinity collectively combined altogether holistically considered taken account altogether whole picture perspective viewpoint outlook stance approach angle context framework backdrop setting environment atmosphere climate milieu landscape scene stage arena platform forum space field domain realm territory sector sphere dimension scope extent range reach span breadth width depth height level layer stratum tier rung step grade rank position standing status place spot site location venue locality 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