“It is difficult to come up with any one definition for the American Dream that every American will agree on,” wrote Derek Miller, a Certified Educator in Personal Finance in the study piece. “But certainly for many people, it includes homeownership, economic opportunity and diverse communities. For these people, they need to live in a city where homes, and mortgages, are affordable and where it’s possible to climb the economic ladder.”
In order to rank the best places for living the American Dream, SmartAsset looked at the largest 257 cities which they had data for. Specifically, they looked at five metrics: homeownership rate, diversity rate, upward mobility rate, median home value and unemployment rate.
In order to rank the best cities for living the American Dream, specifically, they compared the cities across the following five metrics:
- Homeownership rate. This is the percent of households who own their home. Data comes from the Census Bureau’s 2016 1-year American Community Survey.
- Diversity score. To create this statistic, they looked at the population percentage of different racial and ethnic groups in each city. A lower number represents more diversity. Data comes from the U.S. Census Bureau’s 2016 1-year American Community Survey.
- Economic mobility. This metric looks at generational change in economic position for families. A higher number shows greater mobility. Data comes from The Equality of Opportunity Project.
- Home value. This is the median home value in every city. For this study, a lower home value is considered better as we use it as a measure of affordability. Data comes from the Census Bureau’s 1-year American Community Survey.
- Unemployment rate. This is the unemployment rate by county. Data comes from the Bureau of Labor Statistics and is for January 2018.
”To create the overall index, we ranked each city in each metric,” Miller wrote. “Then we found the average ranking for each city. Using this average ranking, we created our final score. We based our final score on that index. The city with the best average ranking received a 100 the city with the worst average ranking received a 0.”
For more information on the study, visit https://smartasset.com/mortgage/the-best-cities-for-living-the-american-dream-in-2018 or email firstname.lastname@example.org.
[Information via news release from the city of Palmdale.]