College graduates seeking to find a job and conquer the professional world will also need to prevail against rising rental costs. A change in location can reduce how many roommates you need in order to make your budget work, but every major rental market in America comes with financial challenges.
Personal finance experts typically advise graduates to live like they did in college for a reason: real life is expensive. Out of the largest 25 rental markets, fewer than 19% of all listings are affordable for college graduates between the ages of 22 and 25, according to an analysis from Trulia. Affordability is determined by whether the total monthly payment, including rental payment and insurance, is less than 31% of the metro area’s median income for recent graduates.
For example, the median salary for a recent grad is $25,778 per year in St. Louis, Mo. If you’re making this much money, then you can only rent homes that cost less than $666 per month based on the 31% guideline. Unfortunately, this means only 18.6% of the homes for rent in St. Louis, Mo. are within reach, without roommates helping to foot the bill. Making matters worse, the St. Louis, Mo. metro has the highest percentage of affordable rentals in the analysis. The next three metros with the most affordable rentals are Dallas, Tex., Houston, Tex., and Atlanta, Ga.
The most expensive rental places to live in are typically found along the coast. Let’s take a look at the top 10 metros in America where graduates need to earn the most money to afford the median rent.
Income needed: $69,421
The Windy City has a knack for toppling budgets. Graduates need an income of $69,421 to afford the median rent of $1,770. However, the actual median income of recent grads is a mere $25,778, making only 0.90% of rentals affordable. Trulia finds that two roommates will likely be needed to help keep housing costs manageable.
9. Orange County
Income needed: $74,794
An ocean breeze comes at steep price. In fact, California finds itself on the the top 10 most expensive list four times. Graduates need an income of $74,794 to afford the median rent of $1,907. In reality, recent grads in Orange County have the same median income as Chicago grads ($25,778), and will also need two roommates to comfortably afford a rental.
Income needed: $76,971
Moneyball doesn’t just apply to the Oakland Athletics baseball team. Recent grads will need to be strategic about their rental options, as less than 1% of rentals are considered affordable by Trulia. The median rent in the area totals $1,963, requiring a median income of $76,971. The actual median income of recent grads is only $27,841.
7. Washington, D.C.
Income needed: $77,461
The nation’s capitol requires an income of $77,461 to afford the median rent of $1,975. While that is a hefty price tag, the land of politics has the highest median income for recent grads on the list at $37,120, making 2.2% of rentals affordable to recent grads. Unlike the other most expensive metros, a recent grad could probably afford to have only one roommate.
Income needed: $82,363
Massachusetts finds itself on the top 10 most expensive list twice. Recent grads in Cambridge, Mass. need an income of $82,363 to comfortably afford the median rent of $2,100. In other words, roommates are probably needed. Trulia finds recent grads will need two roommates to pay the median rent, as their median income is only $31,552.
5. Los Angeles
Income needed: $85,697
The City of Angels ranks No. 5 on the list with median rent of $2,185. Recent grads in Los Angeles, Calif. need an income of $85,697, or at least two or three dependable roommates. The median income of recent grads is $25,778, making more than 99% of the rental market unaffordable without roommates.
Income needed: $86,285
With only 0.4% of rentals affordable to recent grads flying solo, Miami, Fla. may best be suited for spring breaks. According to Trulia, grads need $86,285 to afford the median rent of $2,200. That compares to an actual median income of $25,778 for grads, meaning more than two roommates are recommended to help shoulder the costs.
Income needed: $98,052
Boston, Mass. is known as a hotbed for young adults, and they will likely need to room with each other to afford the rent. Recent grads need an income of $98,052 to afford the median rent of $2,500 by themselves. Since the median income is $31,552 for grads in the metro, only 0.70% of rentals are affordable without roommates.
2. New York
Income needed: $121,584
The Big Apple comes with a big price tag. New York, N.Y. is the first metro on the list to require a six-figure income of $121,584. Recent grads have a median income of $32,995, so about three roommates will be needed to afford the median rent of $3,100.
1. San Francisco
Income needed: $137,272
San Francisco, Calif. ranks as the most expensive place to live in, as recent grads need an income of $137,272 to afford a median rent of $3,500. An influx of affluent techies pushes the median income of new grads to $41,244, the highest on the list, but housing costs have soared too. On a positive note, 3.9% of rentals are affordable to recent grads, also the highest on the list.
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