Austin, Texas, January 28, 2026
Austin, Texas, has seen a decline in its economic performance as reflected in the latest Milken Institute’s Best-Performing Cities Index, falling from first to sixth place. This drop has highlighted ongoing challenges such as housing affordability and income inequality. Despite the high-tech sector’s growth, these issues have affected the city’s overall standing in national rankings. To improve its position, Austin may need to focus on strategies that enhance housing affordability and foster community resilience.
Austin’s Economic Performance Declines in Recent Rankings
Austin, Texas has experienced a decline in its economic performance, slipping from its previous top position in national rankings of best-performing cities. This shift highlights challenges in the city’s economic landscape, particularly concerning housing affordability and income inequality.
Recent Ranking Changes
In the latest Milken Institute’s Best-Performing Cities Index, Austin fell to sixth place among large U.S. metropolitan areas. This marks a significant drop from its previous top position in 2024, where it was ranked first among large cities. The 2025 rankings place Austin behind cities such as Raleigh, North Carolina; Ogden, Utah; and Salt Lake City, Utah.
Factors Influencing the Decline
The decline in Austin’s ranking is attributed to several factors:
- Housing Affordability: The city continues to grapple with rising housing costs, making it challenging for residents to find affordable living options.
- Income Inequality: Persistent disparities in income distribution have been identified as a contributing factor to the city’s lower ranking.
- Community Resilience: While Austin has made strides in community resilience, it still faces challenges in this area compared to other top-performing cities.
Comparative Performance
Despite the decline, Austin remains a significant player in the national economic landscape. The city’s high-tech sector continues to be a major contributor to its economy, with substantial growth in employment and wages. However, the challenges mentioned above have impacted its overall performance in recent rankings.
Looking Ahead
To regain its position at the top of national rankings, Austin may need to address these challenges by implementing strategies to improve housing affordability, reduce income inequality, and enhance community resilience. Such efforts could bolster the city’s economic performance and improve the quality of life for its residents.
Frequently Asked Questions (FAQ)
What is the Milken Institute’s Best-Performing Cities Index?
The Milken Institute’s Best-Performing Cities Index is an annual ranking that evaluates the economic performance of U.S. metropolitan areas based on factors such as job growth, wage growth, high-tech sector performance, housing affordability, and community resilience.
Why did Austin’s ranking decline in the 2025 index?
Austin’s decline in the 2025 index is attributed to challenges in housing affordability, income inequality, and community resilience. These factors have impacted the city’s overall economic performance compared to other metropolitan areas.
What steps can Austin take to improve its economic performance?
To improve its economic performance, Austin may need to implement strategies to enhance housing affordability, reduce income inequality, and strengthen community resilience. Addressing these areas could help the city regain its position in future rankings.
Key Features of Austin’s Economic Performance
| Feature | Details |
|---|---|
| Previous Ranking | 1st among large U.S. metropolitan areas in 2024 |
| Current Ranking | 6th among large U.S. metropolitan areas in 2025 |
| Contributing Factors to Decline | Housing affordability, income inequality, community resilience |
| Economic Strengths | Robust high-tech sector, significant employment and wage growth |
| Potential Improvement Strategies | Enhance housing affordability, reduce income inequality, strengthen community resilience |
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Author: STAFF HERE AUSTIN WRITER
The AUSTIN STAFF WRITER represents the experienced team at HEREAustinTX.com, your go-to source for actionable local news and information in Austin, Travis County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as SXSW, Austin City Limits Music Festival, Formula 1 United States Grand Prix, and the Austin Film Festival. Our coverage extends to key organizations like the Greater Austin Chamber of Commerce and Visit Austin, plus leading businesses in technology, automotive, and retail that power the local economy such as Dell Technologies, Tesla, and Apple. As part of the broader HERE network, including HERECollegeStation.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
