SmartAsset recently released its 2024 study on the most livable small cities in the United States.
The study defined small cities as those with a population between 65,000 and 100,000 people. To rank the cities, SmartAsset used data from the Bureau of Labor Statistics data for 2023, the U.S. Census Bureau American Community Survey for 2022, and the Census County Business Patterns Survey for 2021.
SmartAsset ranked the cities by comparing them across the following metrics:
- Housing costs as a percentage of household income
- Percentage of residents below the poverty line
- Unemployment rate
- Percentage of residents with health insurance
- Average commute time
- Proportions of art, entertainment and recreating establishments
- Proportion of accommodation and food service establishments
- Proportion of healthcare establishments
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The Midwest has the most small cities in the top 10, with three cities in Michigan and three in Wisconsin on the list.
"Housing costs are generally recommended by financial planners to be at 28% or less of your gross income, and in these two states we're consistently seeing lower than even 20% sometimes, and that frees a lot of the budget room for folks in these areas," Jaclyn DeJohn, director of economic analysis at SmartAsset, tells CNBC Make It.
DeJohn says the biggest surprises were the number of small cities with housing costs far beyond the recommended amount. Small cities in Florida and New Jersey had the highest housing costs, with residents paying upwards of 40% of their annual income toward housing in some of these places.
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"That means a lot of folks in some small cities are experiencing the cost pressures that folks are seeing in larger cities as well," DeJohn adds. "All the inflation of the last years is definitely not limited to just the big areas. It is important to take a look at these metrics on a place-by-place basis and not just generalize the place based on its size."
The No. 1 most livable small city: Troy, Michigan
Troy, Michigan ranked as the most livable small city in the U.S., according to SmartAsset.
The Michigan city ranked No. 1 "in part due to its residents having the most affordable housing relative to their incomes." Housing costs average 15% of the median household income of $109,444, or about $1,365.
Troy's 15% housing cost average was the lowest in the top 10 cities ranked, and DeJohn says that it's lower than the usual recommended 28%, which is "somewhat unheard of in terms of affordability."
Troy also ranks highly because many of its residents have health insurance, which is associated with livability, according to this study.
"We're interpreting livability as people being able to meet their basic needs... so having health insurance is really important not just for the individuals in the community but for their wider community because it's important for people to have that automatic stabilizer," DeJohn says.
About 20 minutes from Detroit, Troy offers residents the chance to explore hundreds of acres of parkland, several malls, and golf courses. The city is home to several corporate headquarters, including technology firm HTC Global Services.
The average Troy, Michigan, home value is $438,375, up 7.6% over the past year, according to Zillow.
10 most livable small cities in America
- Troy, Mich.
- Rochester Hills, Mich.
- Eau Claire, Wisc.
- Franklin, Tenn.
- Redmond, Wash.
- Appleton, Wisc.
- Apex, N.C.
- Plymouth, Minn.
- Livonia, Mich.
- Oshkosh, Wisc.
The No. 2 most livable small city is Rochester Hills, also in Michigan.
SmartAsset's study found that the housing costs in Rochester Hills were 16.8% of the median household income of $107,137, or about $1,504.
Just like Troy, Rochester Hills shined in the health insurance category, but the city also stood out for its ranking in the percentage of residents below the poverty level category — the ninth best out of the 281 cities ranked in the study.
"Poverty is important because people need to feel more financially stable, and not only that, but if a community is more immersed in poverty, more residents are going to feel desperate, and it's going to be an issue for the dynamics of the entire community," DeJohn says. "It's not only important for people experiencing poverty to be able to get out of it, but it's important for the community as a whole."
Rochester Hills is also a suburb of Detroit and is located just a few miles from Troy. Similar to Troy, the average home value in Rochester Hills is $447,050, up 6.8% over the past year.
The city is also home to the Village of Rochester Hills, a 375,000-square-foot outdoor shopping district.
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