Iowa Named Best State For Middle Class Families: Study

DES MOINES, IA — Iowa is the best state in the nation for middle class households, but it isn't the best place to put your money for growth in 2018, according to studies conducted this fall by GOBankingRates. And the best city to live in, the survey said, is Ames.

The study looked at trends in income, higher education and housing to determine the best state for middle-class households — which the Pew Research Center defines as those with an income that is two-thirds to double the U.S. median household income.

Iowa took the top spot with high scores in almost all metrics studied, including change in proportion of households earning middle class incomes since a previous study; college graduation rates, tuition and fees; and home list price, estimated monthly mortgage payment, and homeownership rates.

The study noted:

“Iowa has a high median household income of middle-class families, and a relatively low drop in median household income change between 1999 and 2014. On the higher education front, Iowa has a high college graduation rate and low in-state tuition and fees. It also has one of the lowest percentage increases in college tuition cost over the last five years. The Midwest state boasts affordable housing, with a median home listing price of only $169,900. In addition, the state has a high homeownership rate.”

Here are the numbers it found for Iowa:

• Median household income of middle class families: $75,953
• Median household income change of middle class: -3.8 percent
• In-state tuition and fees: $8,270
• College graduation rate: 66.3 percent
• Monthly mortgage payment: $787
• Homeownership rate: 69.9 percent

The survey's top five states are all in the Midwest with one exception:

1. Iowa
2. South Virginia
3. West Virginia
4. Nebraska
5. North Dakota

GoBankingRates' survey found the five worst states for middle-class households are Hawaii, Massachusetts, California, New York and New Jersey.

For Ames, there is added good news: That city was found to be the best place in the state to live, based on a low year-over-year employment change and a high change in weekly income.

"Of the metro areas surveyed in this study, Ames has the lowest unemployment rate in Iowa, and it also is the city where weekly income has increased the most," the survey found. "Although employment is growing at a slow rate, it's one of only three cities in the state included in this survey where employment is growing rather than declining."

Iowa only barely made the top half of states where your money will grow in 2018, however. GOBankingRates said Iowa, which came in 22nd, has competitive CD and checking account rates, and at 0.88 percent, "Iowa has the fifth-highest average checking account rate, and its top checking account rate of 4.01 percent is higher than the majority of states." The average one-year CD rate in the state is the 10th highest in the rankings.

Louisiana — with a top savings account interest rate of 7 percent and average checking account interest rate of 1.2 percent — is the best place to put your money, followed by Utah, Washington, Texas and Oklahoma.

Just don't move there.

Patch photo, Melissa Myers