With home prices rising and many people under 65 shying away from buying a home, renters are finding themselves spending more on that monthly payment than ever before.
The recently released annual State of the Nation’s Housing Report from the Joint Center for Housing Studies of Harvard University found the number of renters devoting at least half of their individual income to rent hit a shocking all-time high in 2014 — 11.4 million. And 21.3 million people spent 30% or more of their paycheck on covering rent that year, another number at an all-time high. (Experts recommend you spend 30% or less of your monthly income on this expenditure.)
The report crunches numbers from a variety of sources, including the U.S. Census Bureau, Bureau of Labor Statistics, Consumer Price Indexes and Housing Vacancy surveys.
With the median asking rent for a “newly constructed market-rate multifamily unit built in 2015,” as the report describes it, reaching $1,381 per month, it’s no wonder so many Americans are forgoing a home purchase.
Meanwhile, those who do want to get out of the rental cycle face significant setbacks.
The report notes that down payments remain a challenge, as for many renters, the median value of all financial assets was just $3,000 in 2013, while a 5% downpayment on a median-priced existing home in 2015 cost $11,100. With low-income households becoming more common (defined as those with net wealth of $1,000 or less), the report adds, securing enough for a downpayment is merely a pipe dream.
Additionally, the report says the outstanding student loan service balance jumped from $10,500 in 2001 to $17,000 in 2013.
With these factors in mind, it’s no surprise the report says the national homeownership rate dropped by more than 5 percentage points, from 69% in 2004 to 63.7% in 2015.
It’s that time of year when college seniors are focusing on what’s next: their next job, their next apartment, their next city.
We looked at the 25 cities that have added the most jobs over the past year, based on data from the Bureau of Labor Statistics comparing job numbers from January 2015 through January 2016. From there, we looked at the cost of living, or average monthly cost of a one-bedroom apartment, according to ApartmentList. We also considered the quality of life in each city, or “walkability,” as determined by the apartment search service Walk Score to determine our final rankings.
Using these three qualifiers, we came up with a list of the 15 cities that are the best for college graduates to call home. You may be surprised that these 15 locales aren’t just big names with preposterously high rents — and there’s a reason for that. By sheer job growth, New York and San Francisco are at the top of the list, but when you factor in affordability, they fall short.
Check these places out and see if any may be right for you. (And, as you head out on your next adventure, check out this credit guide for college graduates to help make sure you’re as prepared for life in the “real world” as possible.)
15. Miami, Florida
Monthly rent for a one-bedroom apartment: $1,750
When Miami’s news headlines aren’t being dominated by Dolphins football, the sultry city keeps things cool with avant-garde art and a little Latin flavor. Though not the most walkable city on our list, Miami added a slew of jobs in 2015, and the average monthly rent for a one-bedroom apartment remains somewhat doable.
14. San Diego, California
Monthly rent for a one-bedroom apartment: $1,600
L.A.’s more laid-back neighbor may not be as cosmopolitan as New York or as affordable as San Antonio, but its quality of life rivals both. San Diego ranked high on Walk Score’s list, as it offers outdoor activities year-round. Sadly, its average monthly rent is only $300 or so cheaper than L.A.’s — not exactly a bargain.
13. Orlando, Florida
Monthly rent for a one-bedroom apartment: $950
You don’t have to be a kid or tween to love the Disney capital of the world. The city recently welcomed a chic Four Seasons hotel as well as a Highball & Harvest, a hip restaurant whose produce is grown on the property. An ever-growing network of bike paths and solid rent prices — here, a one-bedroom apartment costs $950 — make Orlando a standout.
12. San Francisco, California
Monthly rent for a one-bedroom apartment: $3,500
San Francisco is like a playground for intellectually curious grads, from the legendary City Lights Bookstore to its dynamic Chinatown. Thanks to Silicon Valley, San Fran keeps adding jobs, though it’s arguable the tech titan’s presence has pushed the cost of rent up even higher. You may want to enlist a roommate or two to split that rent check.
11. San Bernardino, California
Monthly rent for a one-bedroom apartment: $740
Snowboarders will love San Bernardino’s proximity to Big Bear Lake. The 748-acre Bear Mountain touts rails, boxes, walls and pipes and then during the summer it transforms into a center for biking, hiking and golf. Though its job market pales in comparison to San Francisco’s, San Bernardino remains one of the most walkable — and affordable — cities on our list.
10. Austin, Texas
Monthly rent for a one-bedroom apartment: $1,200
The sprawling capital of Texas isn’t all about barbecue and live music (although there’s plenty of both) — it’s an oasis of independent thinking in a sometimes conservative state. Despite the presence of international companies like Dell and Whole Foods, Austin hasn’t added as many jobs as other cities on our list, but its semi-affordable rent and idealistic vibe tip the scales in its favor.
9. Atlanta, Georgia
Monthly rent for a one-bedroom apartment: $1,300
From The Living Walls, an ongoing series of street-art pieces, to Westside Provisions District, an outdoor retail space with intriguing boutiques and eateries, Atlanta is a great city to explore. And despite its reliance on cars for getting around, Atlanta’s jobs market is growing at a rapid clip, all while keeping rent affordable.
8. San Antonio, Texas
Monthly rent for a one-bedroom apartment: $820
Like most cities in Texas, San Antonio offers a low cost of living and an outdoorsy lifestyle almost year-round. Its fledgling Pearl District, once home to the expansive Pearl Brewery, was turned into a hip neighborhood with intimate restaurants and some fun rooftop hangouts. Here’s hoping the quality lifestyle lures more employers to the city.
7. Jacksonville, Florida
Monthly rent for a one-bedroom apartment: $800
Jobs aren’t stampeding Jacksonville, but its cost of living can’t be beat. There’s also its proximity to all those sandy beaches, and the type of weather the Mid-Atlantic could only hope for that make it an even more appealing locale. It may not be the sexiest Florida city around, but its college town charm and laid-back lifestyle could win you over.
6. Detroit, Michigan
Monthly rent for a one-bedroom apartment: $620
This comeback-kid city is finding its edge, thanks to the Eastern Market neighborhood, one of the oldest outdoor food emporiums in the country. Every Saturday, butchers, bakers, food trucks and farmers join the mom-and-pop shops in the main arcades, creating a vibrant homegrown foodie destination. Rent is as inexpensive as can be, but the job market hasn’t rebounded as much as hoped.
5. Chicago, Illinois
Monthly rent for a one-bedroom apartment: $1,670
There’s more to the Windy City than savoring thick-crust deep-dish pizza. In fact, the city has a serious culinary scene, thanks to hip restaurants like Stephanie Izzard’s Girl and the Goat and Grant Achatz’s Next. With monthly rent for a one bedroom averaging less than $2,000 a month, you may not eat out every night, but you should at least have enough pocket change left over for Lollapalooza.
4. New York, New York
Monthly rent for a one-bedroom apartment: $3,320
The city that never sleeps maintains a robust jobs market and rent that will make your eyes water. But if you want to make a name for yourself, this is the best place to do it, and you’ll knock some walking out while you’re at it. Manhattan may still have the edge, but neighborhood boroughs like Brooklyn and Queens are always dynamic and feature more affordable rents for new grads.
3. Los Angeles, California
Monthly rent for a one-bedroom apartment: $1,950
It’s true L.A.’s rent is high. But if you want to work in entertainment — and a slew of related industries — this is the place to be. Hardly a walking city, L.A. can be taxing on drivers. But for all it lacks in public transportation it more than makes up for with killer Baja cuisine and decadent nightlife.
2. Philadelphia, Pennsylvania
Monthly rent for a one-bedroom apartment: $1,330
The City of Brotherly Love has no shortage of landmarks, but its buzzy restaurant scene could steal your attention. The house-made goods at High Street on Market are the stuff of food comas, and the craft beer list at Kyhber Pass Pub is near-perfect. The city is ultra-walkable too — thank the seasonal Spruce Street Harbor Park for that — and its jobs market is on the rise.
1. Phoenix, Arizona
Monthly rent for a one-bedroom apartment: $840
Cheap rent? Check. Jobs? Check. Walkability? Definitely. With its vibrant dining scene and plenty of Southwestern kitsch — The Parlor is an old beauty salon serving house-made mozzarella and pizza — Phoenix is finding its edge. What’s more, there is something for everyone here.