The top 10 best small cities in America for affordability, education, and quality of life are ranked, with Carmel, Indiana leading the way.

For the second consecutive year, Carmel, Indiana has been ranked as the top small city in the United States.

According to WalletHub's annual report, the country's top small cities were ranked based on five categories, including population size, economic conditions, quality of life, education, and health care.

1. Affordability
2. Economic Health
3. Education and health
4. Quality of life
5. Safety

The cities were evaluated from 1 to 100 using information from multiple sources, including the U.S. Census Bureau, Federal Bureau of Investigation, and Bureau of Labor Statistics.

Carmel, an Indianapolis suburb, retained its top ranking due to its high median annual household income of nearly $133,000, median credit score of 775, low 3% unemployment rate, and relatively low housing costs with residents spending only about 14% of their income on rent, which is the 33rd lowest in the country.

"Carmel, a suburb of Indianapolis, provides an affordable living option near the city, according to WalletHub analyst Chip Lupo, who tells CNBC Make It. The area offers the advantages of city living without the high costs associated with it."

According to WalletHub's report, 31% of Americans prefer suburban living, 16% prefer urban areas, and 24% enjoy rural communities.

Most of the top 10 small cities are located in the Midwest and are suburbs of larger metropolitan areas.

Lupo states that according to the data, people are seeking equilibrium. While not all individuals yearn for the vibrancy and bustle of urban areas, some still desire an outlet to these environments nearby.

Most small cities, except for Lexington, Massachusetts, are more affordable than their surrounding big cities.

These are the10 best small cities to live in America

1. Carmel, Ind. (70.99/100)
2. Brookfield, Wis. (70.4/100)
3. Lexington, Mass. (70.23/100)
4. Fishers, Ind. (70.21/100)
5. Appleton, Wis. (70.5/100)
6. Apex, N.C. (69.72/100)
7. Brentwood, Tenn. (69.54/100)
8. Lancaster, Pa. (69.5/100)
9. Bozeman, Mon. (69.18/100)
10. Westfield, Ind. (69.14/100)

Brookfield, Wisconsin, was ranked the second-best small city to live in America, with only 3% of its population living in poverty, which is the 10th-lowest percentage among all the places ranked.

The Milwaukee suburb boasts a stable economy, with over 98% of its population having health insurance, the 11th-highest percentage in the country, and a 96% homeownership rate.

"Lupo emphasizes the importance of a high ownership rate in a community because it provides a sense of stability, which is crucial when moving to a new area. However, constant flipping and renting of houses can make it difficult to achieve this stability."

According to Zillow, the average Brookfield home value increased by 5.1% over the past year to $475,810. Meanwhile, the median rent in Brookfield for all bedroom counts and property types was $1,734 as of October 2024, as reported by Zumper.

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