While it may be natural to focus on income as the measuring stick for financial well-being, household wealth — money that’s in the bank and in assets such as a home, a retirement account or stocks — is just as important. It can influence your ability to ride out financial bumps, educate younger members of your family and retire in comfort.
How easy it is to amass wealth can depend a lot on where you live — whether, for example, the local job market is strong enough for you to get full value for your labor, or whether local housing prices are rising and are helping households build home equity.
We ranked the 21 largest U.S. metro areas for wealth-building after scoring them on everything from how easy and cheap it is to access financial services to how much spare income households have after they meet their expenses. (For more on our methodology, see our related story.)
Metropolitan Riverside has the lowest per capita real GDP — the value of goods and services produced per person — of any city in our ranking, at just $27,960, compared with an average of $59,492. That, along with relatively high unemployment, helped push the area down the rankings.
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Miami actually has negative savable income, on average. That’s possibly because of a large percentage of retirees, who often earn less than they spend because they’re in the “spend-down” phase of their retirement.
According to Bankrate data, Tampa residents have paid the highest rates for 30-year mortgages over the past 5 years, but they still have an above-average homeownership percentage compared with the rest of the group.
Atlantans have lower credit scores, on average, than residents of other metro areas, and above-average non-mortgage debt, hurting their overall ranking. Upsides included the metro area’s healthy real estate market and high rate of homeownership.
Houstonians work hard: The city’s real productivity per person is fifth highest of any city we ranked, contributing to its score for human capital. Unfortunately, people in the Houston area also have the highest non-mortgage debt.
While the city’s home values, as in many cities, haven’t returned to bubble-era highs, Detroit-area homeowners have seen substantial appreciation on their homes in recent years. Motown’s best-in-field ownership rate is a testament to the affordability of homes there.
St. Louis provides an excellent gateway to wealth. Ready access to retirement plans, a large number of bank branches per capita and low mortgage rates have helped boost the city’s score for access to financial services.
D.C.-area residents have among the highest savable income and productivity, and among the lowest unemployment rates of the cities we surveyed, making it a good place for workers to turn the fruits of their labor into wealth over time.
Minneapolis-area workers enjoy the lowest average unemployment rate and the best access to workplace retirement plans, along with a healthy and accessible real estate market — a potent combination for building up net worth.