A new study compares indicators such as housing costs and homeownership rates when ranking the best states to live in in 2021.
Based on 50 some elements, the high score went to New Jersey. To come up with that, the financial data team at WalletHub considered factors from cost of living and income growth to education rate and quality of hospitals.
With 50 from which to choose, every state has its drawbacks and benefits, writes WalletHub's Adam McCann. While personal preference— types of attractions, recreational opportunities, and weather—comes into play, this study considers the data. In doing so, McCann says, "some states clearly outshine the others in various categories."
While New Jersey takes the top overall score, states with the lowest housing costs include Iowa, Nebraska, South Dakota, North Dakota, and Kansas. The highest homeownership rates go to West Virginia, Maine, Minnesota, Delaware, and Michigan. The highest income growth is shown in Oregon, California, Washington, Colorado, and Massachusetts.
The employment situation is the No. 1 player when it comes to attracting and maintaining residents, according to Matthias Hoelzlein, Assistant Professor, Department of Economics at University of Notre Dame, who also hones in on surrounding factors:
"Providing high-quality employment opportunities is certainly the most direct way to attract residents ... The literature has identified other more indirect policies that work well such as infrastructure investment, education, and support for families."
He says housing policy also is important.
"Zoning and building regulation can slow the provision of new housing, in particular, high-density housing in productive cities, which can lead to prohibitively high rents and real estate prices. Carefully relaxing such regulations can improve the quality of the housing stock and keep housing costs affordable for newcomers."
WalletHub also interviewed Mark Partridge, Professor, Department of Agricultural, Environment, and Development Economics, Swank Chair in Rural-Urban Policy at the College of Food, Agricultural, and Environmental Sciences. He weighs in on the importance of local housing markets when determining regions with the brightest future.
"[Consider] housing price changes since early 2020," Partridge said. "Some housing markets have become pretty frothy with rapidly increasing home prices. In many cases that is unsustainable. While I do not expect a national housing bust, I do expect that some of the housing markets that experienced the largest price increases to undergo a downward correction—in other words, one does not want to buy at the peak of the market."
WalletHub's full report is available at WalletHub.com/edu.