Some smaller U.S. cities are taking the lead in terms of quality of life and affordability.
Carmel, Indiana, has been named the best small city in America for 2025, according to a new report from personal finance website WalletHub. Carmel is a suburban city in Hamilton County, just north of Indianapolis.
The study compared cities with populations between 25,000 and 100,000 across 45 key indicators of livability, ranging from housing costs and school-system quality to restaurants per capita and crime rates.
“Carmel, IN, is the best small city to live in, due in part to strong economic factors like one of the lowest unemployment rates in the country, at 3.3%,” said Chip Lupo, a WalletHub analyst. “On top of that, the median annual household income in Carmel is nearly $135,000, 125th-highest out of the more than 1,300 cities in our study.”
The city also scored well on health and safety metrics, with the 11th-lowest share of adults in fair or poor health, the third-lowest pedestrian fatality rate and the 70th-lowest violent crime rate.
Brookfield, Wisconsin, came in second, followed by Apex, North Carolina, in third place. Lexington, Massachusetts; Westfield, Indiana; Fishers, Indiana; Brentwood, Tennessee; Saratoga Springs, New York; Appleton, Wisconsin; and Lehi, Utah, rounded out the top 10.
“Moving from a bustling metropolis to a small city could drastically cut down your cost of living,” the report noted. “On top of that, the best small cities offer strong job markets, high-quality education, good health care, safe living conditions, and plenty of local flair to help you achieve a high quality of life.”
William Miles, a professor at Wichita State University, emphasized housing costs as a primary factor. “The most important factor, since it is the greatest advantage, is the cost of living. Housing is the most important of these. Housing in small cities is much cheaper than in NYC, DC, LA, Boston, etc.”
However, small cities present some negative trade-offs.
“Some drawbacks of living in a smaller city may be diminished opportunities for professional advancement,” Miles said.
Emil Malizia, a professor at The University of North Carolina at Chapel Hill, also stated that small cities tend to cost less but may also offer fewer economic opportunities.
“Policymakers can focus on making their cities attractive to both businesses and new workers by pursuing policies that keep housing and commuting costs low and providing public services in an economical way,” said Miles.
The complete rankings and methodology are available on WalletHub’s website.