Earning

The 10 metro areas where Gen Xers are doing the best financially

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Sandwiched between the Baby Boomers and millennials, Gen Xers, those born between 1965 and 1980, are now mostly in their 40s and early 50s. In many cases, they're contending with the financial responsibilities that come with kids, taking care of their aging parents, and saving for retirement.

While millennials get a disproportionate amount of attention, many Gen Xers are also stressed about money. They have a median household income of $85,800, according to the most recently available census data, but like millennials, members of Generation X must contend with high housing prices, lackluster wage growth, and, in many cases, considerable amounts of student and credit card debt. So they too are trying to find ways to increase their earnings and reduce their cost of living.

Still, some Gen Xers are doing better than others, and where they live can definitely make a difference.

Metro areas where Gen Xers are best off

Using data from Credit Karma, the Federal Reserve Bank of New York, the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, ValuePenguin, and Zillow, the Grow team looked at data from America's 100 largest metropolitan areas to find the top 10 metros where Gen Xers are best positioned to earn above-average salaries, pay down debt, and buy homes.

In these places, Gen Xers enjoy a mix of strong pay and ample job opportunities, as well as more reasonable housing costs, particularly for metro areas.

Here are the top 10 metro areas where Gen Xers are doing the best financially:

1. Des Moines, Iowa

  • Median household income: $78,165 (27.4% above the national median)
  • Median home price: $239,500 (5.6% above the national median)
  • Share of Gen X household income that goes to housing: 15.9%

2. Madison, Wisconsin

  • Median household income: $77,252 (25.9% above the national median)
  • Median home price: $319,900 (41% above the national median)
  • Share of Gen X household income that goes to housing: 16.8%

3. Minneapolis, Minnesota

  • Median household income: $83,933 (36.8% above the national median)
  • Median home price: $329,900 (45.5% above the national median)
  • Share of Gen X household income that goes to housing: 17%

4. Omaha, Nebraska

  • Median household income: $71,151 (15.9% above the national median)
  • Median home price: $232,500 (2.5% above the national median)
  • Share of Gen X household income that goes to housing: 16.7%

5. Milwaukee, Wisconsin

  • Median household income: $65,527 (6.8% above the national median)
  • Median home price: $255,000 (12.4% above the national median)
  • Share of Gen X household income that goes to housing: 17.2%

6. Cincinnati, Ohio

  • Median household income: $68,511 (11.6% above the national median)
  • Median home price: $233,242 (2.8% above the national median)
  • Share of Gen X household income that goes to housing: 15.5%

7. Akron, Ohio

  • Median household income: $62,882 (2.5% above the national median)
  • Median home price: $168,000 (26% below national median)
  • Share of Gen X household income that goes to housing: 15.8%

8. St. Louis, Missouri

  • Median household income: $68,805 (12.1% above national median)
  • Median home price: $209,900 (7.4% below national median)
  • Share of Gen X household income that goes to housing: 16.2%

9. Indianapolis, Indiana

  • Median household income: $62,054 (1.1% above national median)
  • Median home price: $233,990 (3.1% above national median)
  • Share of Gen X household income that goes to housing: 16.6%

10. Pittsburgh, Pennsylvania

  • Median household income: $70,169 (14.3% above national median)
  • Median home price: $187,975 (17.1% below national median)
  • Share of Gen X household income that goes to housing: 14.1%

Most of the metro areas in the top 10 have one striking feature in common: They're in the Midwest. The affordability of many cities there attracts families who are looking to buy homes and save more of their paychecks — significantly more, in some cases.

"I have quite a few clients that live in California," says Katie Brewer, a Dallas-based certified financial planner who runs Your Richest Life, a financial firm focused on Gen X clients. "I always say that if they moved, they'd be swimming in money," as the cost of living in the Midwest is lower than in many coastal cities.

Lower housing costs make the Midwest more affordable

Midwestern metro areas tend to have more affordable housing options, which allows families to save more of their paychecks and grow their wealth. The median price of a home in No. 9 Indianapolis, for example, is $187,975, compared to $226,800 for the U.S. overall, according to data from Zillow.

The cost of rent tends to be significantly lower as well.

More than 38 million U.S. households spent more than 30% of their incomes on housing in 2016, according to data from Harvard University's Joint Center for Housing Studies. In these more affordable metro areas, Gen X households can spend a significantly smaller share: In No. 10 Pittsburgh, for example, that figure is only 14%. That frees up cash for other important priorities.

"For the same price as a little 600-square-foot box in Chicago, you get a full two-story home in Grand Rapids," David Kranker, who moved from Chicago to Michigan in 2018, previously told Grow. "I have definitely felt the cost savings. My grocery bill went from $115 per week to $45 per week. And that's more money you can put towards mortgage payments."

Jobs are key, too

The growth of good job opportunities around the Midwest make it possible to earn more and spend less, Brewer says. In July, the unemployment rate in Des Moines was 2.4%, while the unemployment rate in Madison, our No. 3 metro area, was 2.6%. That's compared to 3.7% nationwide.

The Midwest is a hot spot for hiring right now, and Madison, Milwaukee, Cincinnati, and Indianapolis all stand out as active metro areas for job growth.

The ability to live in smaller, more affordable metro areas is an increasingly available option for workers who already have jobs, too: The increasing popularity and ease of remote work is boosting population in cities off the coasts, the Wall Street Journal reports.

Methodology

Our calculations took into account the following factors: Median Gen X household income, unemployment rate, the percentage of median Gen X income it would take to rent a one-bedroom apartment, the percentage of median Gen X income spent on housing-related costs, the ratio of median Gen X income to median home list price, Gen X home-ownership rate, debt-to-income ratio, percentage of homeowners who are 90-plus days late on their mortgage, percentage of Gen X income spent on student loan payments, average credit score (by state), and the average credit card balance (by state).

This story has been updated to clarify median city versus metro home prices.

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