If you've been worried about the cost of living in El Paso, taking a closer look at the income structure in this city might change your perspective.

According to the Census ACS 2023, the median household income in El Paso is about $48,000, which is approximately 39% lower than the national average of $78,538.

While the numbers might seem concerning at first, the story changes when you consider the cost of living in El Paso.

El Paso is consistently ranked as one of the cities with the lowest cost of living in the U.S. The median home price ranges from $190,000 to $230,000, which is less than half of the national median. Rent is also significantly lower compared to other major cities, with average prices of $850 to $1,050 for a one-bedroom and $1,100 to $1,350 for a two-bedroom. The purchasing power of an income of $48,000 feels very different compared to earning the same amount in California or New York.

The most important employment base in El Paso is Fort Bliss military base. Over 100,000 military personnel and civilian employees are associated with Fort Bliss, and the income of military families often includes housing allowances (BAH) and food assistance (BAS) in addition to their base pay, which can result in a higher effective income than the nominal figures suggest. The Census income survey may not fully reflect these allowances, so the median income of $48,000 might appear lower than the actual household level.

The second largest employment base is border trade with Ciudad Juárez, Mexico. El Paso is one of the largest logistics hubs along the U.S.-Mexico border, and the logistics, manufacturing, and service industries connected to this trade account for a significant portion of local employment. However, wages in these sectors are generally not very high, contributing to the structural factors that keep the median income low. If you've been worried about El Paso's income levels, understanding this structural background may change your perspective.

When calculated based on the ratio of income to home prices, El Paso is one of the cities with the lowest housing burden in the country. With a $48,000 income and a median home price of $210,000, the ratio is about 4.4 times, which is not far from the affordability benchmark of 3 to 4 times. After a 20% down payment, the monthly mortgage would be around $900 to $1,100, which would be about 25% to 28% of the after-tax monthly income. Based on these figures, buying a home in El Paso can be seen as a relatively realistic goal compared to other Texas cities.

From an investment perspective, El Paso has a steady rental demand. Military families tend to prefer renting due to short-term assignments, which helps stabilize the rental market. The cap rate is observed to be in the range of 6% to 8%, which is relatively high compared to other major Texas cities. However, it is reasonable to expect lower home price appreciation compared to Austin or Dallas.

While El Paso may seem like a low-income city based on income figures alone, considering the cost of living structure and its characteristics as a military city can change your judgment. What constitutes the right choice for this city will vary depending on individual life contexts and financial goals, but it is advisable to look at the overall context rather than making decisions based solely on one number.