Loading
Tap on the profile icon to edit
your financial details.

recession-resistant citiesThe Great Recession, which began in 2007 and extended into the early 2010s, wreaked havoc on the global economy at large and the finances of individual Americans alike. When the U.S. unemployment rate peaked at 10.1% in October 2009, many Americans struggled to make their mortgage payments and save money. What’s more, government spending on social safety net initiatives like the Supplemental Nutrition Assistance Program (SNAP) rose by almost a third from 2007 to 2010. Though the U.S. unemployment rate currently sits at 3.5% and the Dow roared toward 30,000 in early 2020 after a decade-long bull market, there are signs of economic vulnerability: At the end of February, the Dow had its worst week since 2008. The economy could crash again, but not every city is equally equipped to weather the next downturn.

To find the most recession-resistant cities in the U.S., we examined nine metrics across three overarching categories: employment, housing and social assistance. Our employment category factors in current unemployment rate, change in unemployment rate during the Great Recession from 2007 through 2010 and the current labor force participation rate. Our housing category factors in housing costs as a percentage of income, change in home value during the Great Recession from 2007 through 2010 and mortgage delinquency rate. Our social assistance category factors in the percentage of the population relying on public assistance, average annual amount of assistance per household and state rainy-day funds as a percentage of state expenditures. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

Key Findings

  • Many Texas cities are recession-proof. The five Texas cities in our top 10 – Frisco, Plano, Denton, Austin and Lubbock – rank in the better third of the study for four metrics: change in unemployment rate during the Great Recession (from 2007 through 2010), change in home value during the Great Recession, percentage of the population relying on public assistance and state rainy-day funds.
  • Bottom-ranking cities saw unemployment rates spike and home values dip during the last recession. Across the 10 worst-ranking cities in our study, the unemployment rate from 2007 through 2010 increased by an average of 8%, compared to a 5.2% average increase across all 264 cities in our study for that time period. The same 10 cities saw an average decrease of 26.9% in home values during the same period, compared to a 13.7% decrease across all cities in our study. Among those 10, unemployment spiked the most in Detroit, Michigan and home values fell the most in San Bernardino, California.

1. Frisco, TX

Frisco, Texas ranks within the top 35% of the study across all individual metrics. Furthermore, it ranks within the top 11 for each of the three categories we considered: employment, housing and social assistance. In terms of employment, Frisco performs particularly well for its relatively low 2018 unemployment rate – tying for the 17th lowest, at 3.1%. In terms of housing, it scores best for housing costs as a percentage of income – ranking fourth overall, at 18.2%. Finally, in terms of social assistance, Texas performs particularly well for its state’s rainy-day funds as a percentage of state expenditures – ranking second-highest of all 50 states at almost 19%.

2. Cedar Rapids, IA

Cedar Rapids, Iowa ranks sixth-highest in the employment category, 12th-highest in the housing category and 10th-highest in the social assistance category. Cedar Rapids has top-10 rates out of all 264 cities in our study for five individual metrics across the three main categories we examined: two in employment, one in housing and two in social assistance. Cedar Rapids has the sixth-lowest 2018 unemployment rate in the study, at 2.7%, and ranks third-best for change in unemployment rate during the Great Recession, given its 0.6% decrease in unemployment during that time. The city has the third-lowest housing cost as a percentage of income, at just above 18%. Furthermore, it has the 10th-lowest percentage of its population relying on public assistance, at 0.9%, and the second-lowest average annual amount of assistance per household, at $826.

3. Plano, TX

Also one of the best cities to buy a family home, Plano, Texas ranks within the top 10% in each of the broader categories we considered and thus demonstrates the strength and potential resilience of its local economy. In particular, the city ranks within the top fourth of the study for all of its employment metrics. In the housing category, it ranks within the top 15% for two of three metrics: housing costs as a percentage of income (ranking 17th-lowest, at approximately 19.4%) as well as change in home value during the Great Recession (ranking 37th-highest, an increase of about 5.6%). Finally, Plano ranks within the top 10 of the study for two of the three social assistance metrics we considered. It comes in ninth for the low percentage of its population relying on public assistance (at 0.8%), and the state of Texas ranks second for the relatively high amount of funds it has saved for a rainy day (at approximately 18.7%).    

4. Denton, TX

Denton, Texas is the No. 4 recession-resistant city in the U.S., in keeping with its status as the No. 2 boomtown in America. It ranks within the top 20% of the study in each of the broader categories for which we looked at data. Specifically, of 264 cities, it ranks No. 34 for employment, No. 50 for housing and No. 3 for social assistance. Using Census Bureau data, we found that the city ranks within the top 16% of the study for two of the three employment metrics we considered: its relatively low increase in unemployment during the Great Recession as well as its relatively high 2018 labor force participation rate. Denton ranks within the top half of the study for all three metrics in the housing category. Finally, it ranks within the top 20% of the study for all three social assistance metrics.

5. Austin, TX

Austin, Texas ranks within the top 11% of the study in each of the categories we considered. Specifically, it ranked 13th-best for employment, 29th-best for housing and 26th-best for social assistance. Austin also holds top-15 rates for individual metrics in each of those categories. In terms of employment, its 2018 labor force participation rate is 10th-highest in the study, at 74.0%. In terms of housing, the average home value in Austin increased by almost 10% during the Great Recession. Finally, Austin ties for the 15th-lowest percentage of the population relying on public assistance, at approximately 1%.  

6. Sunnyvale, CA

Sunnyvale, California ranks within the top fifth of the study for all three categories we considered. Sunnyvale’s 2018 unemployment rate as well as 2018 labor force participation rate also rank within the top 20% of the study, at 3.8% and 73.3%, respectively. In terms of housing, Sunnyvale has the 27th-lowest housing costs as a percentage of income in the study, at about 20.3%, and ties for the lowest 2018 mortgage delinquency rate, at 0.3%. Furthermore, the city ties with Austin for the 15th-lowest percentage of its population relying on public assistance, at approximately 1%.

7. Lubbock, TX

Lubbock, Texas takes seventh place in our study on the most recession-resistant cities in the country due to its top-fourth rankings in all three of the categories we considered: It ranks 29th overall for employment, 59th overall for housing and fourth overall for social assistance. The city has a consistently strong workforce, with the eight-lowest 2018 unemployment rate and the 14th-lowest increase in unemployment rate during the Great Recession – at 2.8% and rising by only 1.2%, respectively. In the housing category, Lubbock has the fourth-highest increase in home value during the Great Recession, at 13.9%. Finally, the city ranks within the top 20% of the study for all of the social assistance metrics, including its relatively low percentage of the population relying on public assistance (approximately 1.5%) and its low average annual amount of assistance per household (approximately $1,852).

8. Cary, NC

Cary, North Carolina holds top-10 spots for both categories of employment and housing, and it ranks within the top 40% of the study for the social assistance category. Census Bureau data shows that Cary performs the best for the lowest housing costs as a percentage of income in the entire study, at less than 17%. Also within the category of housing, Cary had both a relatively high change in home value during the Great Recession, increasing about 4.5%, and a relatively low 2018 mortgage delinquency rate, at 1.4%. On the employment front, the 2018 labor force participation rate in Cary was the fourth-highest in our top 10, at 71.3%. Furthermore, the 2018 unemployment rate was 3.2%, tying for the 20th-lowest overall. Finally, although Cary ranks in the bottom half of the study for one of its social assistance metrics (average annual amount of assistance per household), it has a top-35 rate for the percentage of its population relying on public assistance, at approximately 1.3%, meaning that most residents can support themselves relatively well.

9. Raleigh, NC

Raleigh, North Carolina comes in at No. 9 in our study on the most recession-resistant cities in the U.S. Of the 264 cities, Raleigh is No. 49 in the employment category, No. 8 in the housing category and No. 31 in the social assistance category. The city stands out in employment for its top-25 2018 unemployment rate, at a relatively low 3.3%. In the housing category, it performs particularly well for change in home value during the Great Recession, at an increase of almost 8% during that time. Finally, in the social assistance category, Raleigh has a relatively low percentage of its population that relies on public assistance, approximately 1.4%.

10. Sioux Falls, SD

Sioux Falls, South Dakota ranks within the top half of the study for all three categories we considered, specifically fourth for employment, 18th for housing and 113th for social assistance. Furthermore, it ranks within the top third of the study for six of the nine individual metrics we factored into our rankings. In terms of employment, Sioux Falls ranks within the top 30 of the study for all three metrics. Young professionals looking to start a career in Sioux Falls will likely benefit from the relative health of its job market. In terms of housing, Sioux Falls ranks within the top 30 of the study for two out of three metrics: housing costs as a percentage of income and change in home value during the Great Recession. Finally, in terms of social assistance, Sioux Falls ranks within the top third of the study for the relatively low percentage of its population relying on public assistance.

Data and Methodology

To find the most recession-resistant cities in the U.S., we pulled data for 264 of the largest cities in the country. The data we looked at fell into three categories and included nine individual metrics, three for each category. Specifically, we looked at the following:

  • Employment. For our employment category, we looked at the unemployment rate in 2018, change in unemployment rate during the Great Recession (from 2007 through 2010) and labor force participation rate in 2018. Data comes from the Census Bureau’s 2018, 2010 and 2007 1-year American Community Surveys.
  • Housing. For our housing category, we looked at housing costs as a percentage of income, change in median home value during the Great Recession (from 2007 through 2010) and the 2018 mortgage delinquency rate. Data comes from the Census Bureau’s 2018, 2010 and 2007 1-year American Community Surveys, as well as the Consumer Financial Protection Bureau (CFPB).
  • Social Assistance. For our social assistance category, we looked at the percentage of the population relying on public assistance, average annual amount of assistance per household and state rainy-day funds as a percentage of state expenditures. Data comes from the Census Bureau’s 2018 1-year American Community Survey as well as the Pew Charitable Trusts’ Fiscal 50: State Trends and Analysis report.

We created our final ranking by first ranking each city for each metric. Then we averaged the rankings across the three categories listed above, giving all metrics an equal weighting. For each category, the city with the best average ranking received a score of 100. The city with the lowest average received a score of 0. We then created our final ranking by averaging each city’s score in the three categories. Cities with the highest average ranking are the most recession-resistant while those with the lowest average ranking are the least.

Tips for Preparing for an Economic Recession

  • Assemble rainy-day funds. Just as state budget offices have rainy-day funds, it is important for individuals to have ones as well. It’s never too late to shape up your budget and see how you can strengthen your strategy in order to put aside more for your savings. Use our comprehensive budget calculator to crunch the numbers on your own.
  • Fortify your portfolio by rethinking how you allocate. Does your investment profile need to be more conservative, moderate or aggressive? Understanding what the right balance is for you may help you prepare in the event of an economic recession. Use SmartAsset’s asset allocation calculator to get a sense of what different portfolios can look like for you.
  • Recession-proof your finances with some expert guidance. If you’ve studied your own numbers and still feel at a loss, consider talking your situation through with a professional advisor. Many of these experts may have insight into how to fortify and/or recoup your assets in the event of an economic recession. It may sound just as difficult to navigate the world of financial advisors, but finding the right person who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Questions about our study? Contact press@smartasset.com

Photo credit: ©iStock.com/Ridofranz

Nadia Ahmad, CEPF® Nadia Ahmad is a Certified Educator in Personal Finance (CEPF®) and a member of the Society for Advancing Business Editing and Writing (SABEW). Her interest in taxes and grammar makes writing about personal finance a perfect fit! Nadia has spent ten years working as a seasonal income tax assistant, researching federal, state and local tax code and assisting in preparing tax returns. Nadia has a degree in English and American Literature from New York University and has served as an instructor/facilitator for a variety of writing workshops in the NYC area.
Was this content helpful?
Thanks for your input!