What are the most affordable cities to live in? The answer depends on how you define "affordable" and how you define "city." For example, a city can be defined by its formal boundaries or by the broader metropolitan statistical area that the U.S. Census Bureau considers it to be a part of. Using a variety of metrics, here is a look at some of the places in the United States where your money will go the furthest. (If you are looking for a good deal and have time to wait, a short-sale house may be for you. Check out Purchasing A Short-Sale Property.)
TUTORIAL: All About Inflation
Youngstown-Warren-Boardman and Niagra Falls: Lowest Home Prices
According to National Association of Realtors data, the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, situated roughly halfway between Cleveland and Pittsburgh and a little over an hour's drive from each, had the lowest median sales price for existing single-family homes in the first quarter of 2011. The Lansing, Mich., area was a close second. Forty-three of the 50 areas with the least expensive single-family homes are located in the Midwest or the South.
Coldwell Banker issues a similar report, but its rankings are based on the average listing prices of four-bedroom, two-bathroom homes rather than on median home prices. By Coldwell Banker's methodology, Niagra Falls, N.Y., was the country's least expensive real estate market in its 2011 Home Listing Report with an average list price of $60,820. Detroit comes in at No. 5, with an average home price of $73,363. Of the 50 least expensive cities in the report, the majority are in the Midwest or the South.
Memphis: Big City, Low Cost Of Living
For many people, an area needs to have a large population to really feel like a city. Kiplinger's May 2010 "How Does Your City Stack Up?" report makes it easy to see which big cities (defined as having a population of more than 1 million) have the lowest cost of living.
The cost of living ranges from 86% to 89% of the national average in six major metropolitan areas. This cost takes into account both housing costs and other common household expenses such as food, utilities and transportation. Also included below are Coldwell Banker's average listing prices for these cities.
Memphis - $127,024
St. Louis - $192,306
Nashville - $193,895
Oklahoma City - $157,131
Houston - $187,211
Cincinnati - $186,937
Even though housing expenses are the largest monthly expense for most people, cities can have significantly different housing costs and still have low overall costs of living. We'll see further proof of this fact in the next section.
Harlingen, Texas: Lowest Cost Of Living - Period
The Council for Community and Economic Research's quarterly ACCRA Cost of Living Index ranks more than 300 urban areas from most expensive to least expensive. The index is based on the costs of housing, utilities, grocery items, transportation, health care and miscellaneous goods and services. In the first quarter of 2011, an ACCRA press release named the following 10 cities (five of which are in Texas) as having the lowest cost of living:
Harlingen, TX - $152,245
Fort Smith, AR - NI*
Pueblo, CO - $141,160
Cookeville, TN - NI
Temple, TX - $168,653
Muskogee, OK - $149,654
Martinsville-Henry County, VA - NI
Round Rock, TX - $201,150
Sherman-Denison, TX - $168,847
Brownsville, TX - $124,523
*NI indicates that the average listing price for this city is not included in the Coldwell Banker report.
Best Places To Live
Just because a city has low housing costs or a low cost of living doesn't necessarily make it a desirable place to live.
Data analyst Bert Sperling's well-known "Find Your Best Place" quiz helps people figure out where in the United States they might enjoy living based on factors such as climate, taxes, employment and job growth, utility costs, air and water quality, violent and property crime rates, recreational activities and commute time. Sense of community, proximity to family and employment opportunities in one's field are also common deciding factors when people are choosing where to live.
In April 2008, for example, CNN's Les Christie reported that Youngstown's population was less than half of what it was 40 years ago. A thriving steel mill business once helped the town reach a population of 165,000. One consequence of the massive decline is a great deal of vacant real estate - hence, the low property values.
The Bottom Line
People are willing to pay median sales price ranging from $439,300 to $579,300 to live in places like New York, California and Hawaii because these places offer cultural amenities, job opportunities, climate and natural beauty that are harder to find or nonexistent in many places that have low housing costs. That's why media outlets like CNNMoney publish reports like "Best Places to Live: Money's List of America's Best Small Cities" that consider factors such as an area's major employees, residents' health and school quality in its highly researched analyses and screen out areas with significant job losses, poor education scores and unappealing crime statistics. However, if affordability is your overriding concern, locations like Youngstown and Harlingen are worth consideration. (Find out what to consider before investing in a leased-land property. See Should You Buy Property On Leased Land?)
RetirementExplore the cost of living in Costa Rica, and learn how you could sustain a nice middle-class lifestyle for yourself on about $1,000 a month.
ProfessionalsA cost of living increase for Social Security doesn't look likely in 2016. Here's what retirees should know and what they can do about it.
BudgetingCooking at home saves time and money but most importantly, it could even help lower future health costs.
Investing BasicsThe tiny house movement throws all assumptions about household budgeting and mortgage management out the window, and creates new market segments too.
Home & AutoLearn about the city of San Francisco and why rent has increased so much in the past eight years. Discover more about the top five most expensive neighborhoods.
Home & AutoLearn how much money you need to meet basic expenses in New York City as a student, as a professional and as an unemployed job seeker.
Home & AutoLearn how much it costs to live in San Francisco and how the amount varies based on whether you are a student, a professional or an unemployed job-seeker.
Home & AutoFind out what it takes to live in London, including the average costs of living for students, professionals and unemployed individuals.
Home & AutoLearn how much money it takes to live in Los Angeles and how that amount varies based on whether you are a student, professional or unemployed job-seeker.
Home & AutoLearn the average costs for necessities in Alaska, and understand how much money you need to live as a student, professional and unemployed job seeker.
Social Security benefits are adjusted for inflation. This adjustment is known as the cost of living adjustment (COLA). For ... Read Full Answer >>
The most expensive states for high-income earners are California, Hawaii and New York. The tax rates assessed by these states ... Read Full Answer >>
Calculating a cash budget in Excel is best completed by dividing your budget into inflows and outflows. Excel makes it extremely ... Read Full Answer >>
The consumer price index, or CPI, is considered one of the most fundamental and critically important economic indicators, ... Read Full Answer >>
The Consumer Price Index, or CPI, for an individual area cannot be used to compare living costs among different areas of ... Read Full Answer >>
The consumer price index (CPI) is an economic indicator intended to provide a gauge of inflation, as well as an assessment ... Read Full Answer >>