In a cooling job market, these cities remain hot spots for new grads

As a post-pandemic hiring frenzy fades, Class of 2024 college graduates face a cooling but still solid U.S. job market.  

But the job, and the quality of life, young adults have after graduation may hinge on where they choose to live and work.

With that in mind, Realtor.com this week unveiled a list of top rental markets for recent college grads based on factors such as job opportunities, rent availability and affordability, the share of other grads in the area and cultural amenities.

The No. 1 market? Austin, Texas, followed by Bloomington, Minnesota, and Pittsburgh.

Grads with job offers or plans to live near family may already have a destination picked out, 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 home search,” says Realtor.com Chief Economist Danielle Hale.  

Is the job market getting harder for college grads?

Nationally, hiring is expected to dip 1.9% for 2024 grads versus their counterparts the prior year, according to the National Association of Colleges and Employers.

Why?

What happened to the tech job market in 2024?

Tech and finance companies have been laying off more workers because of excessive hiring during the pandemic and the Federal Reserve’s historically high interest rates, which are aimed at curbing inflation but also squeeze profits at financial companies.

Consulting firms like EY are delaying start dates for new grads in response to a slowdown in demand for their services, LinkedIn says.

And there are two applicants for every job vacancy, compared with just one in 2022, according to LinkedIn.

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Why is the job market harder in 2024

Across the U.S., the number of job openings edged down to 8.5 million in March, the lowest since February 2021. And hiring has slipped below pre-pandemic levels. After job gains averaged 269,000 a month in the first quarter, employers added just 175,000 in April in a possible sign of a coming slowdown.

To identify the top job markets for college grads, Realtor.com ranked 313 cities and towns in the 50 largest metro areas with a population of more than 75,000.

Some broad themes emerge: Midwest markets appear more affordable; vacancy rates are higher in the South due to a surge of multifamily construction; and tech hubs like Austin, Texas, have many entry-level jobs.

"The top rental markets for college graduates are not found in the biggest urban markets," Hale says.

As you check the rankings, keep in mind some key averages for the communities studied:

The average rent-to-income ratio is 29.7%; rental vacancy rate, 6.3%; share of entry-level jobs, 23.9%; and share of recent college grads, 3.4%; unemployment, 4.2%; job posting index, 121; commute time, 30 minutes; number of entertainment, shopping and lifestyle establishments per 1,000 households, 23.9.

Here are the top seven cities for freshly minted college grads in Realtor.com's ranking:

Austin, Texas

◾ Rent-to-income ratio: 21.4%

◾ Share of graduate-friendly occupations (no prior experience required): 29.6% (tops in category)

◾ Share of recent college grads: 3.3%

◾ Average commute time: 26 minutes

◾ Yelp culture and lifestyle business per 1,000 households: 21.5

◾ Rental vacancy rate: 9% (tops in category)

◾ Unemployment rate: 3.3%             

◾ Job postings index (based on average of 100): 125

Bloomington, Minnesota

◾ Rent-to-income ratio: 19.9% (most affordable in category)

◾ Share of graduate-friendly occupations (no prior experience required): 26.7%

◾ Share of recent college grads: 2.5%

◾ Average commute time: 23 minutes

◾ Yelp culture and lifestyle business per 1,000 households: 22.4

◾ Rental vacancy rate: 7.9% (tops in category)

◾ Unemployment rate: 3.1% (Lowest in category) 

◾ Job postings index (based on average of 100): 125

Pittsburgh

◾ Rent-to-income ratio: 21.7%

◾ Share of graduate-friendly occupations (no prior experience required): 26.7%

◾ Share of recent college grads: 4.4% (tops in category)

◾ Average commute time: 25 minutes

◾ Yelp culture and lifestyle business per 1,000 households: 24.6

◾ Rental vacancy rate: 6.3%

◾ Unemployment rate: 3.5%             

◾ Job postings index (based on average of 100): 131

Raleigh, North Carolina

◾ Rent-to-income ratio: 21.4%

◾ Share of graduate-friendly occupations (no prior experience required): 28.8%

◾ Share of recent college grads: 2.9%

◾ Average commute time: 25 minutes

◾ Yelp culture and lifestyle business per 1,000 households: 17.1

◾ Rental vacancy rate: 8.7%

◾ Unemployment rate: 3.4%

◾ Job postings index (based on average of 100): 119

Overland Park, Kansas

◾ Rent-to-income ratio: 20.7%

◾ Share of graduate-friendly occupations (no prior experience required): 24.5%

◾ Share of recent college grads: 3.3%

◾ Average commute time: 22 minutes (lowest in category)

◾ Yelp culture and lifestyle business per 1,000 households: 18.1

◾ Rental vacancy rate: 7.5%

◾ Unemployment rate: 3.4%

◾ Job postings index (based on average of 100): 124

Richmond, Virginia

◾ Rent-to-income ratio: 24.6%

◾ Share of graduate-friendly occupations (no prior experience required): 25.8%

◾ Share of recent college grads: 3.7%

◾ Average commute time: 24 minutes

◾ Yelp culture and lifestyle business per 1,000 households: 24.4

◾ Rental vacancy rate: 4.9%

◾ Unemployment rate: 3.4%

◾ Job postings index (based on average of 100): 127

Scottsdale, Arizona

◾ Rent-to-income ratio: 24.4%

◾ Share of graduate-friendly occupations (no prior experience required): 22.1%

◾ Share of recent college grads: 2.9%

◾ Average commute time: 23 minutes

◾ Yelp culture and lifestyle business per 1,000 households: 25.2

◾ Rental vacancy rate: 8.1%

◾ Unemployment rate: 4%

◾ Job postings index (based on average of 100): 166 (tops in category)