A new study by SmartAsset has revealed Texas as the best destination for affordable living, with four Texan cities—Houston, El Paso, Lubbock, and Laredo—standing out in the top 10 for their low minimum salaries needed to maintain a comfortable lifestyle.
SmartAsset’s analysis, based on February 2024 data, shows that while the average urban adult in major cities in the US requires $96,500 annual income for a comfortable life, residents in Texas cities can achieve this with much less.
Leading the pack is Houston, where a solo adult can manage on just $75,088 per year, or $36.10 hourly. El Paso secured the second position, with a yearly income requirement of $75,254 for a single adult and $180,461 for a family of four.
Similarly, Lubbock claimed the third spot, requiring an annual income of $75,739 for a single adult. The city also holds the fifth spot on GOBankingRates’ list of the fastest-growing and most affordable cities, boasting a five-year growth rate of 4.4% and a typical home value of $204,500.
Why is Texas so affordable?
In essence, Texas’s affordability lies in its unique blend of factors – abundant land, favorable tax structures, diverse housing options, and a commitment to innovation and sustainability.
One of the standout features of Texas’s affordability is its lack of a state income tax. While this may initially seem like a financial burden for residents, it is offset by higher property taxes, ultimately maintaining a favorable balance. This tax structure allows individuals to keep more of their hard-earned income while still contributing to the state’s revenue.
Additionally, in Texas, there’s plenty of land and rules that make it easy to build houses. This helps keep housing prices low. Because there’s lots of space to build and the rules for building are straightforward, it costs less to make homes compared to other places. This means people in Texas have more choices for affordable places to live, whether they want to buy or rent.
On the flip side, topping the charts for pricey living, California comprises seven of the top 10 cities requiring annual salaries of over $100,000 for single adults. San Francisco takes the lead with the highest total salary needed for a family of four, exceeding $339,000 annually. Individuals are leaving California in large numbers, with destinations including not just Texas, but also Tennessee and Oklahoma, as reported by Business Insider, all seeking more affordable living expenses.
New York City, as expected, tops the list for the highest salary required for residents to live comfortably. The average single adult needs $138,750 annually, equivalent to $66.62 per hour, or $318,406 for a family of four. In New York, the average rent for a one-bedroom apartment stands at $4,000, while a two-bedroom apartment costs $4,875.
