Real Estate Story

Everything’s bigger in Texas, including our ability to build wealth.

That’s according to a new study by Bankrate that surveyed the the 18 largest metro areas in the U.S. according to how strong of an environment they provide for making and saving money. Houston ranked No. 1, and Dallas ranked No. 6.

The rankings were created after consulting with experts on which factors should be considered in a conversation about wealth. Here’s what the experts told them were the biggest contributors:

  • After-tax, savable income: This is what’s left over after taxes and necessary expenses. It’s what you could sock away in an interest-bearing account.
  • The job market: Can workers find jobs at competitive wages?
  • Human capital: Can residents find educational opportunities to help advance their careers and earn more money later?
  • Access to financial services: Do people have access to financial products that allow them to invest, save and borrow efficiently?
  • The local housing market: For better or for worse, homeownership is a key way Americans build wealth. If a local housing market is struggling, it can be harder for prospective homebuyers to get a mortgage and for homeowners to accumulate equity.

Other factors considered included participation rates for retirement plans like 401(k)s, a major wealth-building tool for middle-class households. As they noted, “whether or not an employer offers one has a lot to do with the city, both in terms of culture (whether employers think it’s the right thing to do) and supply and demand.”

“If you’re in an area where the unemployment rate is very low, then the employers have to compete for you, and part of how employers compete for you is they offer benefits and they offer retirement plans,” Christian Weller, an economist at the University of Massachusetts Boston, told Bankrate. “Employers do compete on a regional level, on a city level, for talent.”

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