Two Texas cities took top spots in an annual survey of the best-performing cities in the U.S.

Dallas took fifth place in a new Milken Institute report. Austin came in third after adding nearly 5,000 jobs last year in its professional, scientific and tech-services sector, according to the release.

The annual analysis of 200 large metros takes into account job growth, wage and salary growth, and high-tech GDP growth, among other factors.

Via Milken Institute

Despite being the second Texas city to take a top-five spot, Dallas fell two places in the ranking since the previous year.

The report cites higher competition for talent among firms and rising housing costs in coastal regions as a factor in rising prosperity for inland cities but notes that those very same inland cities are beginning to catch a glimpse of the hurdles faced on the coasts.

"Now Middle American cities are beginning to see some of the same problems — labor shortages, higher home prices and longer commutes," said Kevin Klowden, executive director of the Milken Institute Center for Regional Economics and California Center.

Despite the success of Middle America, California cities — propelled by Silicon Valley — still landed top spots, with San Jose and San Francisco making the top five.

Top 10 cities