If you're a recent college grad and want to live alone without a roommate, you may have to move to Houston, Austin, Detroit or Cincinnati to find a rental apartment that won't consume a huge bite out of your income. Houston also has the distinction of being the only metro among 33 studied by Redfin that has shifted from being unaffordable to affordable for solo grads in 2024.
In the remaining metros, the recent grad would likely have no choice but to find a roommate to share the rent with. Redfin's study of 2024 data defined "affordable" to mean asking rent that is no more than 30% of the estimated income for recent college grads. Individuals paying a larger share than that were considered rent-burdened.
Even in San Jose, in the affluent Bay Area of California, where recent grads make an estimated $108,499 a year, they could only escape paying more than 30% by rooming with another person and splitting the rent evenly to bring their costs to 27.8% of their income for the median-priced two-bedroom apartment. That's down from 30.9% in 2023 and helped by a 1.8% slump in asking rents. It was a similar story for roommates in San Francisco, where rents fell 6.7% and new grads earned around $84,388. This city and Sacramento were the only other two in the nation that flipped to affordable from unaffordable for grads with roommates.
"A lot of college grads in the Bay Area are working high-paid Silicon Valley tech jobs, which is why they can afford to live in the most expensive place in America," said Redfin senior economist Sheharyar Bokhari. Nevertheless, Bokhari warned, "Affordability remains a huge problem in the Bay Area — which has one of the highest rates of homelessness in the nation—in part because there is a major shortage of housing."
In other areas of the country, the typical college grad with a roommate could expect to pay 20.6% of their income for a $1,725 median-priced two-bedroom apartment – less than the 22.6% rent would have consumed in 2023. But the college grad living alone would be exposed to a 35.7% cut of their income for a $1,495 median-priced 0–1 bedroom apartment.
"The median U.S. asking rent for 0–1 bedroom apartments fell 0.3% year over year to $1,495 during the three months ending July 31, while the median asking rent for 2 bedroom apartments fell 0.7% to $1,725. Meanwhile, wages have climbed; the median salary for recent college grads is an estimated $60,277, up 9% from $55,300 last year," Redfin commented. But, it added, these encouraging signs mean little for the many Americans, especially those without college degrees, who are struggling simultaneously with rent and rising utility costs.
The rising cost of homeownership has driven the phenomenon by which the nation's renter population is growing three times faster than its homeowner population. And even though the cost of homebuying is cooling, starter homes are still not affordable to many.
For new graduates outside Austin and parts of the Midwest, lower rents may enable them to remain in the same town they went to school in. But graduates from universities in places like New York, Los Angeles and Boston may find themselves in a dilemma in search of affordable housing. "They can move to a different city, but then they risk losing their social network and professional connections from college," Redfin noted.
Meanwhile, grads interested in rooming with another can find good deals in Cincinnati, Houston, Austin and Indianapolis that will not leave them rent-burdened. To avoid that condition, even with a roommate, they should steer away from Los Angeles, New York, San Diego, Riverside, Boston and Miami.