{"id":505116,"date":"2024-09-12T19:10:12","date_gmt":"2024-09-12T23:10:12","guid":{"rendered":"https:\/\/www.rent.com\/research\/?p=505116"},"modified":"2024-09-12T19:10:14","modified_gmt":"2024-09-12T23:10:14","slug":"phoenix-az-college-grad-affordability","status":"publish","type":"post","link":"https:\/\/www.rent.com\/research\/phoenix-az-college-grad-affordability\/","title":{"rendered":"Phoenix Is Relatively Affordable for Recent College Graduates Looking to Rent\u00a0"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Recent college grads have to pay just over 30% of their income to afford a typical one-bedroom apartment in Phoenix \u2013 one of the lowest shares in the nation<\/h3>\n\n\n\n<p>Recent college graduates have a lot to look forward to. Their future is ahead of them as they hunt for a dream job and search for a great place to live. Unfortunately, that last part can be a sticking point.&nbsp;<\/p>\n\n\n\n<p>As rents have <a href=\"https:\/\/www.axios.com\/2024\/06\/21\/high-rent-inflation-pandemic-market-relief\" rel=\"nofollow\">skyrocketed<\/a> since the pandemic, college graduates have had a <a href=\"https:\/\/www.wsj.com\/articles\/the-biggest-problem-for-recent-college-grads-a-surge-in-rent-prices-11652385510\">harder time<\/a> finding an affordable place to live. In Phoenix, recent grads must spend just over the recommended 30% of their income on rent. This is still one of the lowest shares in the nation, which goes to show how elevated asking rents are.&nbsp;<\/p>\n\n\n\n<p>So what\u2019s happening in the rental market? Why is Phoenix relatively affordable for recent college graduates? Read on to learn everything you need to know.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Recent graduates in Phoenix have to pay just over 30% of their income on rent to live alone<\/h2>\n\n\n\n<p>Recent college graduates have to spend 32.9% of their income to afford a one-bedroom apartment (\u201clive alone\u201d) in Phoenix, AZ. This is the seventh-lowest share in the nation. Affordability has improved since 2023, when a graduate needed to spend 38.0% of their income on rent.&nbsp;<\/p>\n\n\n\n<p>Even though Phoenix is affordable compared to most other large metros, recent grads still have to spend more than 30% of their income on housing, which qualifies as \u201c<a href=\"https:\/\/www.huduser.gov\/portal\/pdredge\/pdr_edge_featd_article_092214.html\">rent-burdened<\/a>.\u201d<\/p>\n\n\n\n<p><strong>Phoenix is relatively affordable because of its low asking rents<\/strong>. The median rent in Phoenix is below the national median, sitting at $1,369. The median salary among recent grads is well below the national median, though, sitting at $56,660.&nbsp;<\/p>\n\n\n\n<p>Phoenix\u2019s affordability gets better when looking at renting with a roommate (i.e. renting a two-bedroom apartment), where the typical grad needs to spend just 19.8% of their income on rent.&nbsp;<\/p>\n\n\n\n<p>However, even though Phoenix is relatively affordable for recent college graduates, the same can\u2019t be said for the overall population. The Phoenix metro area has a poverty rate of <a href=\"https:\/\/eig.org\/persistent-poverty-in-communities\/case-studies\/south-phoenix\/\">31%<\/a>, over twice the national rate. Statewide, <a href=\"https:\/\/www.axios.com\/local\/phoenix\/2024\/02\/02\/arizona-renters-cost-burden\">50%<\/a> of renter households are rent-burdened \u2013 on par with the national average.<\/p>\n\n\n\n<p>Phoenix was the poster child for pandemic migration, as <a href=\"https:\/\/www.redfin.com\/news\/q1-2022-housing-migration-trends\/\">coastal residents flocked<\/a> to the desert city for its sunshine and affordability. This has put a <a href=\"https:\/\/www.azfamily.com\/2024\/07\/16\/report-details-ongoing-affordability-challenges-arizona-renters-face\/\">massive strain<\/a> on renters in the past few years, who often have less <a href=\"https:\/\/www.urban.org\/urban-wire\/wealth-gap-between-homeowners-and-renters-has-reached-historic-high\">accumulated wealth<\/a>. <a href=\"https:\/\/azmag.gov\/Programs\/Maps-and-Data\/Land-Use-and-Housing\/Housing-Data-Explorer\" rel=\"nofollow\">Nearly 15%<\/a> of renters in Phoenix now spend more than 50% of their income, and Maricopa County <a href=\"https:\/\/www.cbsnews.com\/news\/eviction-phoenix-rent-housing-maricopa-county\/\">led the nation<\/a> in eviction filings over the past year.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Nationwide recent college graduate rental affordability<\/h2>\n\n\n\n<p>Nationwide, recent college grads have to pay 35.7% of their income to afford a one-bedroom apartment. This is down from 39% in 2023, underscoring how rents have stabilized and wages have increased in the past year. Let\u2019s dig a bit deeper.<\/p>\n\n\n\n<p>Generally, asking rents have <a href=\"https:\/\/www.redfin.com\/news\/redfin-rental-report-january-2024\/\">held steady<\/a> since late 2023, due to a <a href=\"https:\/\/www.redfin.com\/news\/redfin-rental-report-march-2024\/\">surge<\/a> of new construction buoying supply and <a href=\"https:\/\/www.redfin.com\/news\/housing-migration-trends-november-2023\/\">waning<\/a> pandemic-era migration hampering demand. This is a major reason why most metros became more affordable for recent college grads in the past year. An <a href=\"https:\/\/www.brookings.edu\/articles\/we-should-focus-on-rising-wages-not-just-inflated-prices\/\">increase<\/a> in wages, <a href=\"https:\/\/www.epi.org\/publication\/swa-wages-2023\/\">especially<\/a> among low-income groups, has also helped improve affordability \u2013 even <a href=\"https:\/\/www.bankrate.com\/banking\/federal-reserve\/wage-to-inflation-index\/\">outpacing<\/a> historic inflation.&nbsp;<\/p>\n\n\n\n<p>However, even though new apartment construction has helped satiate demand, much of it has been catered to higher-income renters. From 2012-2022, an additional 8.4 million units rented for more than $1,400\/month, compared to a <em>decrease<\/em> of 2.1 million units renting for less than $600\/month. $1,400\/month is an unaffordable rent for a <a href=\"https:\/\/www.npr.org\/2024\/01\/25\/1225957874\/housing-unaffordable-for-record-half-all-u-s-renters-study-finds\">majority of Americans<\/a>. And while wages have risen faster than inflation, rents climbed <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-05-07\/us-rents-climbed-1-5-times-faster-than-wages-in-last-four-years\">even faster<\/a> in large metros from 2019-2023, seriously straining budgets.&nbsp;<\/p>\n\n\n\n<p>Even still, America\u2019s renter population is growing three-times faster than its homeowner population, in part because house prices are at record highs. <a href=\"https:\/\/www.redfin.com\/news\/renters-becoming-homeowners-2024\/\">Nearly 40%<\/a> of U.S. renters don\u2019t believe they\u2019ll ever own a home. Mortgage rates <a href=\"https:\/\/www.redfin.com\/blog\/is-now-a-good-time-to-buy-a-house\/\">have been falling<\/a> recently, though, providing a glimmer of hope.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Metro-level highlights&nbsp;<\/h2>\n\n\n\n<p>Nationwide, 29 out of the 33 metros analyzed require recent college graduates to spend more than 30% of their income on rent for a one-bedroom apartment. The four most expensive are <a href=\"https:\/\/www.rent.com\/new-york\/new-york\/apartments_townhouses_condos_houses\">New York<\/a> (56.3%), <a href=\"https:\/\/www.rent.com\/california\/los-angeles\/apartments_townhouses_condos_houses\">Los Angeles<\/a> (54.9%), <a href=\"https:\/\/www.rent.com\/massachusetts\/boston\/apartments_townhouses_condos_houses\">Boston<\/a> (54.8%), and <a href=\"https:\/\/www.rent.com\/california\/riverside\/apartments_townhouses_condos_houses\">Riverside<\/a> (53.7%).&nbsp;<\/p>\n\n\n\n<p>These trends flip when looking at two-bedroom apartments: 27 out of 33 metros are <em>affordable <\/em>to recent grads, with just the most expensive coastal metros requiring more than 30% of a grad\u2019s income.<\/p>\n\n\n\n<p>One of the most interesting metros in the dataset is Austin, which went from unaffordable (35.2%) to affordable (28.3%) in one year. This makes sense; Austin was the poster child for booming metros during the pandemic, seeing <a href=\"https:\/\/www.redfin.com\/news\/q4-2020-housing-migration-trends\/\">a huge surge in migration<\/a> from 2020 to mid-2022. This flood of new money and demand led to <a href=\"https:\/\/www.newsweek.com\/austin-housing-market-sinking-1843057\">skyrocketing housing costs<\/a>, large inflation increases, and a <a href=\"https:\/\/www.redfin.com\/news\/america-building-fewer-apartments-2024\/\">surge in new construction<\/a>. However, once the sharp interest rate hikes and return-to-office mandates started in 2023, the city\u2019s fortunes reversed, leading to price drops and <a href=\"https:\/\/www.redfin.com\/news\/housing-migration-trends-q3-2023\/\">population loss<\/a>. Now, some property managers are <a href=\"https:\/\/www.redfin.com\/news\/rents-fall-in-florida-austin-june-2024\/\">having to compete<\/a> for tenants.<\/p>\n\n\n\n<p>San Jose is surprisingly affordable to new grads, despite having the highest rents in the country. This is because a lot of recent grads in the Bay Area are working high-paid Silicon Valley tech jobs, making <a href=\"https:\/\/sanjosespotlight.com\/san-jose-leads-nation-in-hiring-new-college-grads\/\">six-figures<\/a> right out of college. The median salary for recent grads in San Jose is $108,449, for example.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">10 Most Affordable Metros for Recent College Graduates<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Metro<\/strong><\/td><td><strong>2024: Share of income college grads need to spend for 0-1 bedroom apartment<\/strong><\/td><td><strong>2023: Share of income college grads need to spend for 0-1 bedroom apartment<\/strong><\/td><td><strong>2024: Share of income college grads need to spend for 2 bedroom apartment<\/strong><\/td><td><strong>2023: Share of income college grads need to spend for 2 bedroom apartment<\/strong><\/td><td><strong>Estimated median salary of recent college grads<\/strong><\/td><td><strong>Median asking rent: 0-1 bedrooms<\/strong><\/td><td><strong>Median asking rent: 2 bedrooms<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/texas\/houston\/apartments_townhouses_condos_houses\">Houston, TX<\/a><\/td><td>27.0%<\/td><td>25.2%<\/td><td>17.2%<\/td><td>17.5%<\/td><td>$60,277<\/td><td>$1,142<\/td><td>$1,449<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/michigan\/detroit\/apartments_townhouses_condos_houses\">Detroit, MI<\/a><\/td><td>27.8%<\/td><td>28.9%<\/td><td>17.3%<\/td><td>19.2%<\/td><td>$60,277<\/td><td>$1,193<\/td><td>$1,148<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/texas\/austin\/apartments_townhouses_condos_houses\">Austin, TX<\/a><\/td><td>28.3%<\/td><td>35.2%<\/td><td>17.2%<\/td><td>21.2%<\/td><td>$62,688<\/td><td>$1,310<\/td><td>$1,595<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/ohio\/cincinnati\/apartments_townhouses_condos_houses\">Cincinnati, OH<\/a><\/td><td>29.9%<\/td><td>28.9%<\/td><td>16.9%<\/td><td>16.9%<\/td><td>$59,071<\/td><td>$1,240<\/td><td>$1,400<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/texas\/dallas\/apartments_townhouses_condos_houses\">Dallas, TX<\/a><\/td><td>30.5%<\/td><td>35.4%<\/td><td>19.3%<\/td><td>22.6%<\/td><td>$66,305<\/td><td>$1,347<\/td><td>$1,707<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/north-carolina\/charlotte\/apartments_townhouses_condos_houses\">Charlotte, NC<\/a><\/td><td>32.5%<\/td><td>37.5%<\/td><td>18.7%<\/td><td>21.9%<\/td><td>$57,866<\/td><td>$1,371<\/td><td>$1,580<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/arizona\/phoenix\/apartments_townhouses_condos_houses\">Phoenix, AZ<\/a><\/td><td>32.9%<\/td><td>38.0%<\/td><td>19.8%<\/td><td>22.9%<\/td><td>$56,660<\/td><td>$1,369<\/td><td>$1,647<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/indiana\/indianapolis\/apartments_townhouses_condos_houses\">Indianapolis, IN<\/a><\/td><td>33.4%<\/td><td>34.6%<\/td><td>18.5%<\/td><td>21.4%<\/td><td>$54,249<\/td><td>$1,317<\/td><td>$1,460<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/georgia\/atlanta\/apartments_townhouses_condos_houses\">Atlanta, GA<\/a><\/td><td>33.4%<\/td><td>38.0%<\/td><td>19.6%<\/td><td>21.2%<\/td><td>$60,277<\/td><td>$1,416<\/td><td>$1,663<\/td><\/tr><tr><td><a href=\"https:\/\/www.rent.com\/florida\/jacksonville\/apartments_townhouses_condos_houses\">Jacksonville, FL<\/a><\/td><td>34.0%<\/td><td>45.8%<\/td><td>20.0%<\/td><td>25.5%<\/td><td>$54,249<\/td><td>$1,293<\/td><td>$1,524<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Table sorted by average share of 0-1 bedroom rentals affordable to recent college graduates<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Methodology<\/h2>\n\n\n\n<p>According to a <a href=\"https:\/\/www.redfin.com\/news\/college-grad-rent-burden-2024\/\">Redfin analysis<\/a> analyzing rents in apartments with five or more units from Redfin.com and Rent.com through July 2024 among the 33 most populous U.S. metros. The analysis estimated 2024 salaries for employed college graduates aged 22-29 (\u201crecent college grads\u201d) using U.S. Census Bureau\u2019s 2022 American Community Survey data and 2023-2024 wage growth data from the Atlanta Federal Reserve. To be included, a grad must have had an annual income of at least $15,000 at the time of the survey.&nbsp;<\/p>\n\n\n\n<p>An \u201caffordable\u201d rental is defined as one where the asking rent is no more than 30% of the local estimated income for recent college grads. Graduates who rent apartments above the 30% cutoff are considered \u201crent burdened.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The typical recent college grad has to spend 36% of their income on rent. In Phoenix, the amount recent grads need to spend is lower, at just over 30%. So, why is the area relatively affordable? <\/p>\n","protected":false},"author":1022,"featured_media":505115,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19835,19832,19828],"tags":[],"topics":[195,202],"renters":[],"cities":[],"propertymanagement":[],"class_list":["post-505116","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-trends","category-renting-trends","category-research","topics-data-research","topics-news-trends"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.1 (Yoast SEO v24.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Phoenix Is Relatively Affordable for Recent College Grads | Rent. Research<\/title>\n<meta name=\"description\" content=\"The typical recent college grad has to spend 36% of their income on rent. But in Phoenix, the share is just over 30%. 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