• Washington, DC is the second-best place to build wealth, says Bankrate.com.
  • Consumer debt was the deciding factor between DC and first-place finisher Houston.
  • Strong job market helped DC into a top spot.

According to a study of a variety of conditions that help people build wealth in 18 large cities, Washington, D.C., comes in second only to Houston.

Bankrate ranked the largest metro areas in the U.S. according to how strong of an environment they provide for making and saving money. The group said that the key criteria for creating and maintaining a nest egg in a worker’s prime earning years include:

  • After-tax, savable income
  • The job market
  • Residents’ debt
  • Human capital
  • Access to financial services
  • The local housing market

The Houston metro area came out on top for its excellent job market, lowest consumer debt and high savable income.

But, according to Bankrate’s Claes Bell, it was a close contest for the top two spots on the list.

“Washington was pushed out of first place by debt,” said Bell, a banking analyst. “They never really experienced a housing crisis to recover from, but people who live in D.C. are weighed down by student loans and mortgages.”

And that idea, added Bell, is the conversation that Bankrate hopes to start with this new ranking.

“When people think about wealth-building,” Bell explained, “they don’t think about the expense side. We want to get people thinking about the entire picture. D.C. has, however, a strong job market.”

Other places that round out the top 10 are:

  1. Houston
  2. Washington, D.C.
  3. Cleveland
  4. Detroit
  5. New York City
  6. Dallas-Fort Worth
  7. Baltimore
  8. Miami
  9. Minneapolis-St. Paul
  10. Chicago

To create this inaugural list, Bankrate chose criteria for what helps build wealth based on extensive research and interviews with economic and financial experts. The researchers then gleaned the list of the 18 biggest U.S. metros for spending from the Consumer Expenditure Survey.

They then looked at roughly five years of data from their own databases, the U.S. Census Bureau, the Bureau of Labor Statistics, RealtyTrac, the Employee Benefit Research Institute, the Urban Institute, the National Association of Realtors, S&P/Case-Shiller Home Price Index, the Federal Deposit Insurance Corp. and the Department of Education.

Bell added that two important facets in wealth-building are access to financial services and employer-based retirement plans, both areas in which D.C. excels.

“When people think about wealth-building, they don’t think about the expense side. We want to get people thinking about the entire picture.” – Claes Bell, Bankrate

“To build wealth, people need financial planning services nearby, and they have to have the ability to access consumer credit in car loans, mortgages and savings accounts.”

Bell says that he hopes that the rankings will not only create conversations about wealth-building for individuals and families no matter their life stage, but will give policy-makers strong data about the importance of long-term financial security of it’s residents.

One example, Bell says, is that perhaps the data can be used to study the impact of affordable housing on financial well-being locally.

Email Kimberley Sirk.

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