Realtor News

Austin’s economy may be growing slower than in recent years, but Austin is the best place to live in the United States, according to U.S. News and World Report.

After ranking No. 2 a year earlier, the Texas capital took the top spot in the magazine’s 2017 edition of its Best Places to Live in the U.S. list, which ranks major metro areas on a number of factors including unemployment, annual household income, cost of living, education, health care and migration.

Denver, which ranked No. 1 in 2016, dropped to No. 2 this year. San Jose, California was ranked No. 3, followed by Washington, D.C., and Fayetteville, Arkansas.

Austin’s high score is due to its booming population growth as well as a strong showing in U.S. News’ desirability survey, which asked 2,000 internet users where in the U.S. they would prefer to live. Over the past five years, Austin has averaged annual population growth of about 3 percent. Further, in 2016 the regional population estimate increased above 2 million people, according to the U.S. Census Bureau.

Putting Austin over the top this year was growth in the region’s median salary and the continued improvement in the regional unemployment rate, which has hovered at around 3 percent for the past 12 months.

But as Austin scores highly on other livability rankings trotted out by city boosters, regional economic grown has begun to slow. According to economic indicators tracked by the Federal Reserve Bank of Dallas, Austin’s economic growth reached its post-recession peak in early 2015. Since then, the economy has continued to grow, but that growth rate is now slower than the 10-year average for growth.

“We celebrate what we’re doing right to be ranked first, recognizing it also highlights the accompanying affordability, equity and mobility challenges that our city faces,” Mayor Steve Adler said in a statement. “Inherent in that ranking is the strength to manage growth so we can preserve Austin’s special spirit.”

The authors of the U.S. News list say the rankings are intended to help people better decide where to relocate. The rankings are based on a weighted index that mixes the U.S. Census Bureau’s socio-economic stats, the FBI’s crime statistics and the Department of Labor’s wage and economic data with proprietary data, such as polling on market desirability.