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Rents are so damn high. But the situation is somewhat better than last year, and it\u2019s good news for one particular group: recent college graduates.\u00a0<\/p>\n
The typical recent college grad would need to spend almost 21% of their income to rent a median-priced, two-bedroom apartment, equal to $1,725 a month\u2014and that\u2019s assuming they\u2019re splitting the rent with a roommate. But that\u2019s down from close to 23% last year, according to a recent Redfin analysis<\/a> of apartment asking rents through July 2024 and estimated 2024 salaries for employed college graduates ages 22 to 29, so a lot of Gen Zers and some millennials.\u00a0<\/p>\n For those wanting to live alone, though, the typical grad would need to spend close to 36% of their income to rent a $1,495 median-priced studio or one-bedroom apartment, still down from 39% last year.<\/p>\n \u201cRents are falling in many parts of the country at the same time that wages are rising,\u201d Redfin senior economist Sheharyar Bokhari said in the analysis. \u201cThat\u2019s why college grads are less likely to be rent burdened than they were last year.\u201d\u00a0<\/p>\n Of course, affordability varies depending on where you live and work. In San Jose, one of the pricier metropolitan areas in the country, a recent college grad would need to spend almost 28% of their income to rent a typical, two-bedroom apartment (again, assuming they\u2019re living with a roommate and divvying up the rent). That\u2019s just below the rent-burdened threshold<\/a>, which is defined as spending more than 30% of your earnings on housing. And only a year ago, that same college grad living in the city would need to spend about 31% of their money on rent.\u00a0<\/p>\n There are a couple factors at play. First, according to Redfin, the Bay Area has the highest salaries for college grads, which isn\u2019t surprising given it\u2019s the world\u2019s technological epicenter. Per the analysis, the typical recent college grad in San Jose makes roughly $108,500, and the median asking rent for a two-bedroom home in San Jose fell close to 2% from a year earlier. Either way, it doesn\u2019t mean all is well in the Northern California region, or the West<\/a> for that matter.\u00a0<\/p>\n \u201cA lot of college grads in the Bay Area are working high-paid Silicon Valley tech jobs, which is why they can afford to live in the most expensive place in America,\u201d Redfin senior economist Bokhari said. \u201cBut affordability remains a huge problem in the Bay Area\u2014which has one of the highest rates of homelessness in the nation\u2014in part because there is a major shortage of housing.\u201d\u00a0<\/p>\n In Austin, on the other hand, the typical recent college grad would need to spend about 28% of their income to rent a median-priced studio or one-bedroom apartment, down from roughly 35% last year. It was the only metropolitan area to go from being considered unaffordable to affordable for recent college graduates who want to live alone. Asking rents in Austin for one-bedroom apartments and studios plummeted close to 13% (one of the greatest falls nationwide) compared with a year before in the three months prior to August. Austin happens to be the best place for renters overall<\/a>, according to Realtor.com.<\/p>\n \u201cStudents who graduate from university in Austin\u2014or in parts of the Midwest where rents have always been low\u2014have an advantage because they can typically afford rent in the same town where they went to school,\u201d Redfin chief economist Daryl Fairweather said in the analysis. \u201cBut college grads in places like New York, Los Angeles, and Boston may have tougher decisions to make.\u201d<\/p>\n She continued: \u201cWhile those places are home to highly regarded universities, graduates will have a harder time finding a local job that pays the rent. They can move to a different city, but then they risk losing their social network and professional connections from college.\u201d<\/p>\n Even with roommates, recent college graduates in Los Angeles, New York, San Diego, Riverside, Boston, and Miami are considered rent burdened, meaning they\u2019re spending more than 30% of their income on housing, per Redfin. And still, in each metropolitan area, it\u2019s an improvement from last year. Rents across the country are softening, and landlords are sweetening deals<\/a> in the wake of skyrocketing prices throughout the pandemic.<\/p>\n<\/div>\nExplore our new special issue.\u00a0<\/strong>A Wall Street legend gets a radical makeover, crypto iniquity, misbehaving poultry royalty, and more.\u00a0Read the stories.<\/a><\/div>\n