Where New Grads Can Find a Roof and a Paycheck
As hundreds of colleges and universities turn out thousands of new graduates this month, the real estate finance industry has one thought on its mind: household formation.
After all, graduation represents the next stage in life: a college degree; a new job; income; and independence. A perfect formula for moving out of Mom and Dad’s house and into an apartment or a home of their own.
A new blog from Trulia, San Francisco, and job site Indeed, Austin, Texas, examines the best and worst options for new graduates–where to find the best jobs and where to find the most affordable housing. Unfortunately, the report says, those two don’t necessarily go hand in hand.
“Sorry, graduates: the unfortunate truth is that good job markets go hand in hand with expensive housing,” wrote Trulia Chief Economist Ralph McLaughlin and Indeed Chief Economist Jed Kolko. That said, the blog identified some unlikely sweet spots where job markets are good for new graduates and the housing is relatively affordable.
For new graduates, one option is to move back home, they said: increasingly, young adults are living with their parents, especially if they don’t have a job. For others, though, the post-college launch often starts with relocation: 31% of recent college grads moved to a new home in the past year, compared with 11% of adults overall. These educated young adults are particularly prone to move for a job or a job search. Whereas just 1.4% of all adults moved in the past year to take or look for a new job, 6.2% of young college grads did – that’s more than four times the rate of adults overall.
Trulia and Indeed identified six metros where grads can spend a bit less on housing without giving up too much on the job options: Seattle, Hartford, Baltimore, Pittsburgh, Detroit and Dayton, Ohio, all are more affordable than most other markets with similar job opportunities.
The highest median income for new graduates was in metro Washington D.C., followed by San Jose, San Francisco, Houston, and New York.
“What might seem like a fat New York or Bay Area salary, though, might not get you far,” said McLaughlin and Kolko. “Just 3% of metro New York listings are affordable at the median local recent-grad personal income; San Jose and San Francisco are even less affordable. In fact, none of the 10 highest-income metros is among the most affordable: where incomes are higher, housing costs are, too. The five most affordable markets for new grads are all in the Midwest. But the second-most affordable, Youngstown, also has the lowest share of job-postings in new-graduate occupations.”
This “Catch-22” of job and housing market means new grads often have to choose between a paycheck or a roof over their heads, the authors said. “Nearly all of the metros with the most job opportunities for recent grads are among the least affordable,” they said.
But ultimately, they added, new grads shouldn’t despair. Among metros that offer similar job opportunities for new grads, there are places that offer greater affordability. “While there’s no place that offers it all–tons of job opportunities and easily affordable housing…your best bet is to do your homework this summer to find a good mix of jobs and affordable rent.”
The blog can be accessed at https://www.trulia.com/blog/trends/trulia-indeed-grads-17/#sthash.EZnIQS8p.dpuf.
