Austin, Texas, rapidly became known as a pandemic hot spot for home buying.
Today, it’s seen as the best place for college graduates to rent. That’s according to a recent report from Realtor.com economist Jiayi Xu, who ranked the top 10 best markets for recent graduates.
The area, which has undoubtedly seen an abundance of activity in recent years as more people and companies move into the area, notched the top spot on Realtor.com’s list given that it offers the best mix of affordable renting options, job opportunities and appealing lifestyle amenities, according to Xu.
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Notably, the report analyzed areas that specifically had college graduate-friendly occupations, which require a bachelor’s degree but not a lot of experience, Realtor.com chief economist Danielle Hale told FOX Business.
“You’ve got a lot of companies in these markets in general that often happen to rank No. 1 on this particular metric and are looking for young, educated but not necessarily experienced workers,” she said.
In fact, the influx of people that have moved to the area in recent years drew in a lot of companies.
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“It becomes this self-reinforcing positive cycle,” Hale added.
Austin, which is part of the Austin-Round Rock metro area and home to many tech-fueled company offices, has the highest share of college-friendly occupations on the list.
But the economists focused on trying to balance the amount of opportunity in an area with affordability. While Austin saw a surge in costs for buyers, rental costs have actually come down, according to Hale.
“Relative to what we saw in the for sale market, we didn’t see quite as much of a run-up in Austin rents,” she said, adding that rents “are generally falling in the South” on a year-over-year basis.
Austin may have the best combination of opportunity and affordability, but in terms of rent-to-income ratio, which is the portion of someone’s typical gross income allocated to housing expenses, it’s not the cheapest.
All the top 10 markets as a group are located in metro areas that have an average rent-to-income ratio of 22.5% for households between ages 25 and 34, according to the analysis. However, Bloomington, Minnesota, which is located within the Minneapolis-St. Paul-Bloomington metro area, was the most affordable on the list with the rent-to-income ratio sitting at 19.9%, Xu said.
Overland Park and St. Louis within the Kansas City metro area were also among the most affordable with rent-to-income ratios sitting at 20.7% and 21.7%, respectively.
