Kyle is the second-best city in Texas for home ownership, according to a report released Jan. 31 by a national consumer advocacy website.

NerdWallet compiled a list of the top 20 cities in the state for owning a home based on each municipality's home inventory, affordability and population growth.

Little Elm, a northern suburb of Dallas, was ranked no. 1.

Three other Austin suburbs—Leander (no. 3), Cedar Park (no. 6) and Pflugerville (no. 8)—made the list, composed mostly of towns in the outlying areas of major metropolitan cities.

"I think it would be fair to draw the conclusion that these areas have what it takes to be good areas for home ownership," Maggie Clark, analyst for NerdWallet, said.

San Marcos, however, came in 113th out of 115 total communities studied by the website.

Clark said San Marcos's poor rating stems from its high cost-to-income ratio. San Marcos homeowners spend about 61 percent of their income on housing-related costs, she said.

Homeownership costs in Kyle account for 23 percent of the median household income, according to the report. The city is among the three lowest in that category.

Kyle's 81 percent homeownership rate means many who settle in the area feel comfortable setting roots there.

With rapid population growth, the city has been a hub for economic development.

In October 2009, Seton Medical Center Hays opened, and major retailers and restaurants have followed suit. In 2015, a Walmart store near the medical center is expected to open its doors.

The economic development stimulated more population growth, said realtor Bruce King.

"All of a sudden, here we are with all these new people moving in," he said. "We're expected to have a whole bunch of people move in here by 2020, and the growth is going to be crazy."

King described the good interest rates, healthy home inventory and employment opportunities in Kyle as a "perfect storm" for people to move to the city.

King himself was drawn to the real estate profession when Seton Hays arrived, he said.

"I knew we were going to grow and recognized it'd be a good community to live in," King said.

Only cities with populations of 25,000 or higher were considered for the study.

For more information on NerdWallet's study, visit https://www.nerdwallet.com/blog/2014/best-cities-homeownership-texas/.