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How Middle-Class Incomes Stack Up in Major Texas Cities
The discussion around the stability of the American middle class continues to be a hot topic as we approach the 2024 elections. With rising costs of living, increasing real estate prices, and higher grocery bills, many middle-class workers find their salaries are no longer sufficient, particularly in large urban areas.
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Texas, known for its blend of big cities and small towns, offers contrasting living expenses. While small towns often provide a more affordable lifestyle, major urban centers like Austin and Dallas attract many people, despite their high costs. For those contemplating moving to a Texas city, it’s crucial to evaluate whether their middle-class income will suffice in their chosen location. GOBankingRates has gathered key statistics on median income and living costs in seven prominent Texas cities to help you make an informed decision about homeownership or renting.
Austin
- Median income: $86,556
- Annual cost of living for homeowner: $63,603
- Surplus of income for median middle-class homeowner: $11,546
- Annual cost of living for renter: $45,660
- Surplus of income for median middle-class renter: $29,489
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Dallas
- Median income: $63,985
- Annual cost of living for homeowner: $48,372
- Surplus of income for median middle-class homeowner: $26,777
- Annual cost of living for renter: $45,960
- Surplus of income for median middle-class renter: $29,189
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Arlington
- Median income: $71,736
- Annual cost of living for homeowner: $47,661
- Surplus of income for median middle-class homeowner: $27,488
- Annual cost of living for renter: $46,685
- Surplus of income for median middle-class renter: $28,464
Fort Worth
- Median income: $72,726
- Annual cost of living for homeowner: $46,582
- Surplus of income for median middle-class homeowner: $28,567
- Annual cost of living for renter: $46,602
- Surplus of income for median middle-class renter: $28,547
Houston
- Median income: $60,440
- Annual cost of living for homeowner: $44,308
- Surplus of income for median middle-class homeowner: $30,841
- Annual cost of living for renter: $44,848
- Surplus of income for median middle-class renter: $30,301
San Antonio
- Median income: $59,593
- Annual cost of living for homeowner: $41,493
- Surplus of income for median middle-class homeowner: $33,656
- Annual cost of living for renter: $40,985
- Surplus of income for median middle-class renter: $34,164
El Paso
- Median income: $55,710
- Annual cost of living for homeowner: $38,645
- Surplus of income for median middle-class homeowner: $36,504
- Annual cost of living for renter: $41,924
- Surplus of income for median middle-class renter: $33,225
Methodology: GOBankingRates analyzed the top 50 populated cities using data from the U.S. Census 2023 American Community Survey. Metrics included total population, number of households, median household income, and population aged 65 and older.
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Exploring the Cost of Living for Middle-Class Families in Major U.S. Cities
This analysis investigates how far a middle-class salary stretches in various American cities. We used specific financial indicators to present a clearer picture of affordability for households earning between the lower and upper limits of middle-class income.
Analyzing Financial Data
To begin, we calculated the percentage of the population aged 65 and over to understand demographic trends. Additionally, we gathered cost of living indexes from Sperling’s BestPlaces, focusing on essential categories such as grocery, healthcare, housing, utilities, transportation, and miscellaneous expenses. This gave us a comprehensive overview of living costs in different areas.
Calculating Average Expenditures
With the cost of living indexes established, we sourced national average expenditure costs from the Bureau of Labor Statistics Consumer Expenditure Survey. This information facilitated the calculation of average expenditures for each location. Furthermore, we obtained the average single-family home value from the Zillow Home Value Index for September 2024.
Assessing Mortgage Costs
Using the average home value, we calculated the average mortgage by assuming a 10% down payment and applying the latest national average 30-year fixed mortgage rate provided by the Federal Reserve Economic Data. We combined this mortgage amount with the average expenditure costs to determine total monthly and annual living costs.
Understanding Livability and Middle-Class Income
The livability index for each location, sourced from AreaVibes, was included to provide further context. According to the Pew Research Center, the middle-class income range is defined as two-thirds to double the national median income. We used this definition to calculate the middle-class income range for each city. By comparing income levels with total living costs, we identified whether households had leftover income or needed additional funds.
Comparing Cities
The cities were organized to highlight where middle-class families face the greatest financial challenges, showcasing how far a typical salary stretches in the largest U.S. urban centers. All data is current as of November 5, 2024.
This article originally appeared on GOBankingRates.com: How Far Does a Middle-Class Salary Go in Texas? Check Out Austin and 6 Other Big Cities.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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