As the post-pandemic hiring frenzy fades, college graduates in the class of 2024 face a cooling but still robust U.S. job market.
But the jobs and quality of life young adults will have after graduation may depend on where they choose to live and work.
With that in mind, Realtor.com this week revealed a list of Main rental markets for recent college graduates based on factors such as job opportunities, rental availability and affordability, the proportion of other graduates in the area, and cultural amenities.
The number one market? Austin, Texas, followed by Bloomington, Minnesota, and Pittsburgh.
Graduates with job offers or plans to live close to family have likely already chosen a destination, but “others who are still considering their options and want to explore a new area may want to consider this curated list of cities in their job and housing search,” says Danielle Hale, chief economist at Realtor.com.
Is the job market getting tougher for college graduates?
Nationwide, hiring is expected to fall 1.9% for 2024 graduates compared to their counterparts from the previous year, according to National Association of Colleges and Employers.
Because?
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Technology and financial companies have been laying off more workers because of over-hiring during the pandemic and the Federal Reserve’s record-high interest rates, which are meant to curb inflation but also reduce financial firms’ profits.
Consulting firms such as EY are delaying start dates for new graduates in response to a slowdown in demand for their services, LinkedIn says.
And there are two applicants for every open position, compared to just one in 2022, according to LinkedIn.
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Why will the job market be tougher in 2024?
Across the U.S., the number of job openings fell to 8.5 million in March, the lowest level since February 2021. And hiring has fallen below pre-pandemic levels. After job gains averaged 269,000 a month in the first quarter, employers added just 175,000 in April, potentially signaling an impending slowdown.
To identify the best job markets for college graduates, Realtor.com ranked 313 cities and towns in the 50 largest metropolitan areas with populations of more than 75,000.
Some general themes emerge: Midwestern markets appear more affordable; vacancy rates are higher in the South due to a surge in multifamily housing construction; and tech hubs like Austin, Texas, have plenty of entry-level jobs.
“The primary rental markets for college graduates are not in the larger urban markets,” Hale says.
When reviewing the rankings, keep in mind some key averages for the communities studied:
The average rent-to-income ratio is 29.7%; the rental vacancy rate is 6.3%; the share of entry-level jobs is 23.9%; and the share of recent college graduates is 3.4%; unemployment is 4.2%; the job posting rate is 121; the commute time is 30 minutes; and the number of entertainment, shopping and lifestyle establishments per 1,000 households is 23.9.
These are the top seven cities for recent college graduates according to Realtor.com’s ranking:
Austin, Texas
◾ Rent-to-income ratio:21.4%
◾ Percentage of jobs favorable to recent graduates (no prior experience required):29.6% (leader in its category)
◾ Percentage of recent college graduates:3.3%
◾ Average travel time: 26 minutes
◾ Yelp Culture & Lifestyle per 1,000 Households:21.5
◾ Rental vacancy rate:9% (category leader)
◾ Unemployment rate:3.3%
◾ Job vacancy rate (based on an average of 100):125
Bloomington, Minnesota
◾ Rent-to-income ratio:19.9% (the most affordable in the category)
◾ Percentage of jobs favorable to recent graduates (no prior experience required):26.7%
◾ Percentage of recent college graduates:2.5%
◾ Average travel time: 23 minutes
◾ Yelp Culture & Lifestyle per 1,000 Households:22.4
◾ Rental vacancy rate:7.9% (category leader)
◾ Unemployment rate:3.1% (the lowest in the category)
◾ Job vacancy rate (based on an average of 100):125
Pittsburgh
◾ Rent-to-income ratio:21.7%
◾ Percentage of jobs favorable to recent graduates (no prior experience required):26.7%
◾ Percentage of recent college graduates:4.4% (category leader)
◾ Average travel time: 25 minutes
◾ Yelp Culture & Lifestyle per 1,000 Households:24.6
◾ Rental vacancy rate:6.3%
◾ Unemployment rate:3.5%
◾ Job vacancy rate (based on an average of 100):131
Raleigh, North Carolina
◾ Rent-to-income ratio:21.4%
◾ Percentage of jobs favorable to recent graduates (no prior experience required):28.8%
◾ Percentage of recent college graduates:2.9%
◾ Average travel time: 25 minutes
◾ Yelp Culture & Lifestyle per 1,000 Households:17.1
◾ Rental vacancy rate:8.7%
◾ Unemployment rate:3.4%
◾ Job vacancy rate (based on an average of 100):119
Overland Park, Kansas
◾ Rent-to-income ratio:20.7%
◾ Percentage of jobs favorable to recent graduates (no prior experience required):24.5%
◾ Percentage of recent college graduates:3.3%
◾ Average travel time:22 minutes (the lowest in the category)
◾ Yelp Culture & Lifestyle per 1,000 Households:18.1
◾ Rental vacancy rate:7.5%
◾ Unemployment rate:3.4%
◾ Job vacancy rate (based on an average of 100):124
Richmond, Virginia
◾ Rent-to-income ratio:24.6%
◾ Percentage of jobs favorable to recent graduates (no prior experience required):25.8%
◾ Percentage of recent college graduates:3.7%
◾ Average travel time: 24 minutes
◾ Yelp Culture & Lifestyle per 1,000 Households:24.4
◾ Rental vacancy rate: 4.9%
◾ Unemployment rate:3.4%
◾ Job vacancy rate (based on an average of 100): 127
Scottsdale, Arizona
◾ Rent-to-income ratio:24.4%
◾ Percentage of jobs favorable to recent graduates (no prior experience required):22.1%
◾ Percentage of recent college graduates:2.9%
◾ Average travel time: 23 minutes
◾ Yelp Culture & Lifestyle per 1,000 Households:25.2
◾ Rental vacancy rate:8.1%
◾ Unemployment rate: 4%
◾ Job vacancy rate (based on an average of 100):166 (first in their category)
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