It’s graduation season and the class of 2015 will soon be entering the job market, and the housing market. Newly employed graduates are moving to new cities to start their first jobs. Unfortunately, a high percentage of their salaries will go towards rent, if they can afford a place of their own at all.
A new study conducted by housing economists at Trulia found that out of the 25 largest rental markets, less than 19 percent of all rental listings are affordable for recent college graduates.
The study measured affordability as whether the total monthly payment, including rental payment and insurance, is less than 31 percent of the metro area’s median income for recent graduates.
The study found that those who choose to live in Midwestern or Southern states can generally save the most money on rent. However, even in St. Louis, which tops the list as the most affordable city for new graduates, just 18.6 percent of rental units are considered affordable by the study’s standard. Trulia finds that Portland, Oregon is the least affordable city for recent college grads, with only 0.1 percent of rental units considered affordable for someone with a starting salary.
And while it may be tempting to move to a city with a high rate of employment and higher median wages such as San Francisco, Washington, DC, or New York, what you gain in salary, you will lose in high monthly rent payments.
Aside from soaring rental costs, many graduates have the additional burden of student loans to deal with. College students graduating this year have been reported as the most indebted class in history; the average graduate with student loan debt owes more than $35,000.
