An expert claims that the low cost of living in this Texas city is due to 'investment in the area.'
The latest regional price parities data from the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) was used by Realtor.com to determine the top 10 cities with the lowest cost of living this month.
The BEA states that regional price parities measure the percentage differences in price levels of goods and services across states and metropolitan areas compared to the overall national price level.
According to Hannah Jones, senior economic research analyst at Realtor.com, the majority of cities on the list are located in the South and Midwest.
Jones remarks that housing is a significant factor, with home prices being generally lower in the South and Midwest.
"As demand increases, markets in the South and Midwest can expand, which helps keep housing costs low because of their ability to adapt."
McAllen, Texas is the U.S. city with the lowest cost of living
McAllen, Texas was ranked as the city with the lowest cost of living, with an 86.92% RPP and a 13% lower cost of living compared to the average. Residents can purchase $100 of necessities for $86.82, and the median home price is $275,000.
McAllen's No. 1 ranking is due to its low housing costs, with a home price-to-income ratio of 4.8, meaning home prices are 4.8 times the median household income.
Jones states that McAllen has a lot of space to spread and it has been a good amount of investment in the area, which keeps home prices relatively low.
In September, the number of homes available increased by 41% compared to the previous year, she stated.
"Given the high demand in McAllen, the ample supply keeps the cost of living relatively affordable, particularly in terms of housing."
McAllen, situated on the border between Mexico and the US, is a significant tourist and trade center. The region is popular among border crossers and boasts a diverse, bicultural population.
McAllen, a Texas city, is renowned for its numerous shopping districts. Numerous Mexicans venture across the border to shop in McAllen prior to returning south, as stated on the city's website.
The top 10 U.S. cities with the lowest cost of living
- McAllen, Texas
- Wichita, Kan.
- Little Rock, Ark.
- Toledo, Ohio
- Scranton, Pa.
- Dayton, Ohio
- Tulsa, Okla.
- Akron, Ohio
- Birmingham, Ala.
- El Paso, Texas
The median home price in Wichita, Kansas, is $292,700, making it the No. 2 city with the lowest cost of living. Its RPP is 89.16%.
The national standard for the cost of living necessities is 11% higher than what Jones reports.
She added that both low home prices and low necessity prices are visible to buyers and residents in the area.
Wichita, the largest city in Kansas, is renowned as "The Air Capital of the World." It is the birthplace of White Castle, Pizza Hut, and Koch Industries, the private conglomerate of Charles and David Koch.
Wichita is home to Spirit AeroSystems, a leading global aerostructure manufacturer.
The city also has three universities, including Wichita State University.
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