Forbes: Birmingham is the most affordable city in the United States

—

March 13, 2015

BIRMINGHAM, Ala. — A new study by Forbes has found that Birmingham is the most affordable of the 100 largest cities in the United States.

The study looked at housing affordability by measuring the price of houses against the median income. Though Birmingham has a lower than national average median family income, the price of housing is also much lower. They found that 81.5 percent of housing in the area is affordable to a resident of Birmingham making the median pay.

The study also looked at the cost of living for the metropolitan areas of the 100 American cities with populations of 600,000 or more. They measured the cost of food, utilities, gas, transportation, medical expenses, and other daily expenses in each area, and weighed that against the Bureau of Labor Statistics’ Consumer Price Index.

Unsurprisingly, the study found that most of the most affordable cities are in the south and midwest; not a single west coast city made the list. Why?

“The industry that was located in the South was mostly labor-intensive, compared to capital-intensive industry in the Midwest or on the East Coast,” director of economic forecasting at the University of Alabama’s Center for Business and Economic Research Ahmad Ijaz told Forbes. “Wages in labor-intensive industries (an example of that would be textiles and apparel, or farming) are much lower than they are in capital-intensive industries. So that’s where the foundation of low costs started.”

Forbes added that while much of the south has progressed to more technologically advanced industries, “the legacy remains in the form of lower taxes, wages, housing, and daily expenses throughout much of the Southern region.”

Here are Birmingham’s stats that made it top the list:
Median Family Income: $61,000
Q4 2014 median sales price: $130,000
Housing affordable at median family income: 81.5%
Cost Below (or Above) National Average: Groceries: 5.4%; Utilities: (3.5)%; Transportation: 13.2%; Health: 16.6%; Misc.: 2.6%

Here are the top 10 most affordable large cities:

1. Birmingham, AL
2. Knoxville, TN
3. Buffalo, NY
4. Oklahoma City, OK
5. Cincinnati, OH
6. Memphis, TN
7. St. Louis, MO
8. Dayton, OH
9. Indianapolis, IN
10 (tie). Columbus, OH
10 (tie). Detroit, MI