How affordable is Cincinnati? Here's how our costs compare

Inflation has been a constant pain point for businesses and consumers since the pandemic recovery ramped up, and no metro has been immune.

However, Greater Cincinnati remains relatively affordable when it comes to goods and housing.

That’s according to a Business Journals review of data from the Bureau of Economic Analysis Regional Price Parity Index, which reflects how costs compared between metros in 2022. We analyzed the nation's 100 largest metro areas.

The index shows how costs compare in a metro compared to the national baseline of 100. That means a metro with an index of 90 would be 10% more affordable than the national average, for example. The data also includes specific index scores for the cost of housing, services and goods in each metro.

Greater Cincinnati ranked 29th in overall affordability, with an index of 93.48. The region performed best in the cost of goods, ranking ninth out of the 100 largest metro areas (92.4). Cincinnati also fared well, ranked 30th, when it comes to housing costs (97.66), though those have risen since the start of the pandemic, both for renters and for buyers. Since July 2019, home values in Cincinnati are up 50%.

When it comes to utilities costs, Cincinnati ranked 38th out of 100 metros. The region's lowest affordability ranking was for other services, coming in at No. 50.

The national picture

Supply chain disruptions, soaring consumer demand and home price appreciation were three of the factors that led to soaring inflation.

Not surprisingly, the trends were particularly evident on the coasts.

San Francisco was the nation’s least affordable metro in 2022, with an overall index of 117.90. The city has wrestled with affordable living and homelessness for years and is currently struggling to fund the ambitious redevelopment of Alameda Point, a former naval air station, into affordable housing units.

Nearby San Jose came in second at 115.26. To combat its own lack of affordable housing, developers are converting existing office space into apartment communities as Silicon Valley businesses continue to depart for tax-friendlier Texas.

San Diego (114.51), Oxnard-Thousand Oaks (114.4), Seattle (113.68) and Los Angeles (113.11) also ranked among the nation's least affordable metros.

It's a dynamic that experts say can affect a company's ability to recruit talent. It was also a major factor in the Great Migration that took place during and in the immediate aftermath of the pandemic.

“Where someone lives plays a crucial role in their long-term financial health. High cost of living areas can deplete disposable income making it harder to save for retirement or invest in real estate,” said Yuri Nosenko a wealth advisor at Hollywood, Fla.-based Imperial Fund Asset Management.

“On the other hand, living in a more affordable area allows individuals to stretch income, save more and build wealth,” he said. “The ideal balance is finding a high-paying job that can be done remotely while living in an affordable area.”

Nosenko said wealth managers have seen an increased demand for financial planning services that focus on sustainable budgeting and inflation-resistant investments. The industry is also advising clients to adjust retirement plans to account for the increased cost of living as inflation erodes purchasing power.

San Jose ranked as the least affordable housing market in the nation with a housing index of 233.3. The five most expensive metros for housing were all in California.

Midwest and Southern cities remain most affordable

McAllen, Texas (86.93); Little Rock, Ark. (89.16); and Wichita, Kan. (89.17) were the nation’s most affordable large metros overall.

They were joined by a host of metros from across the Sun Belt – a region that dominated post-pandemic migration patterns.

Young professionals flocked to these states during the height of the pandemic, fleeing high-dollar rents with the rise of remote work.

But that trend has cooled, even for metros that can sell affordability.

“Relocation is a much harder sell today than it was a decade ago, or even as recently as before the pandemic,” said Angel Beets, CEO of Cincinnati-based Gilman Partners, an executive search firm. “When we mention relocating, it’s common for a candidate to ask about the possibility of hybrid or remote work instead.”

McAllen (57.6); Scranton, Pa. (65.1); and Little Rock (65.2) ranked as the most affordable large metros for housing.