Top 5 Markets for College Grads in 2023

It’s graduation season! Assuming they don’t all return to their parent’s basements, we’ve got a list of the top markets for college grads. 

Zillow has named Colorado Springs, CO, as the #1 market on its 2023 list of the top five markets for college grads, so named for their relatively affordable rents, smaller populations, and abundance of career prospects. 

For college graduates just entering a new phase of life, these qualities contribute to a higher quality of life compared to what they could expect in larger and pricier metros like Denver, Seattle, and NYC. 

Zillow’s ranking is based on an index combining each metro’s rent-to-income ratio, average salary for recent college grads, number of job openings, and the percentage of the population in their 20s. The idea behind it is to identify markets that provide fresh graduates with not only promising career opportunities but also manageable housing costs. 

The top five markets for college grads

Here are Zillow’s top five markets for college graduates, along with their typical rent and rent-to-income ratio:

1. Colorado Springs, CO (with a typical rent of $1,824 and a rent-to-income ratio of 35%)
2. Spokane, WA ($1,563; 31%)
3. Des Moines, IA ($1,202; 24%)
4. Phoenix, AZ ($1,918; 37%)
5. Buffalo, NY ($1,257; 25%)

Colorado Springs is home to the University of Colorado–Colorado Springs and is a prime example of how the qualities these markets are known for can provide a better quality of life for new college grads. The typical graduate can expect to earn around $63,000 a year. And while the rent-to-income ratio is among the highest on the list (second only to Phoenix), the strong job market and large population of 20-somethings make this the #1 grad-friendly market on the list. 

Spokane, like Colorado Springs, is a college town (home to Gonzaga University) and the second-largest metro in its state. The typical rent here is $1,563 compared to Seattle’s $2,223, and the average graduate will spend roughly 31% of their income on rent. While fewer 20-somethings live here, the abundance of job opportunities elevates it to #2. 

Des Moines, distinguished for being the #1 city in the U.S. for insurance companies, has the lowest rent-to-income ratio of all the top ten markets. The typical rent is $1,201, while the typical income graduates can expect is $59,697. Coupled with Des Moines’ strong job growth, the affordability of housing makes this metro worth considering. 

And then there’s Phoenix, which—even with the highest rent-to-income ratio on the list—has plentiful job opportunities for recent graduates, along with a sunny climate and a higher population of 20-somethings. Since the typical rent takes 37% of the typical graduate income of $62,000, finding a roommate to split the cost is highly recommended. 

Buffalo, at #5, offers a relatively low typical rent at $1,257—a full $2,000 cheaper than what grads can expect in NYC. While there are relatively few 20-somethings in this metro, the low cost of housing and the abundance of job offers makes it a respectable place to start. 

Rounding out the top ten— 

#6—Albuquerque, NM (with a typical rent of 1,531 and a rent-to-income ratio of 31%)

#7—Bakersfield, CA ($1,767; 32%)

#8—Albany, NY ($1,524; 29%)

#9—Portland, OR ($1,856; 31%)

#10—Little Rock, AR ($1,199; 28%)

Phoenix and Portland are the largest metros on the list by population size. And while their typical rents are the highest on the list, Portland’s average salary for recent grads is generous enough to offset the higher housing costs. And Phoenix leads with its superior number of job prospects, exceeding all the other metros in Zillow’s analysis. 

With their relatively high populations of 20-somethings and still relatively affordable rent-to-income ratios, both Portland and Phoenix are excellent options for graduates looking for a more big-city environment with an abundance of entertainment options. 

Navigating the rental market

If you, as an agent, have occasion to help some of your clients or prospects find a suitable rental for a college graduate in their household, there are few things you can recommend to make the process of finding a rental easier and as low-stress as possible: 

1. Take advantage of 3D home tours and interactive floor plans to get the most value from online apartment shopping. 
2. Schedule tours online for the units that tick the most important boxes. Zillow makes it easy to do this with their rental listings. 
3. Create a rental budget and research your market to explore available and budget-friendly options, as well as to learn what details you can negotiate. 
4. Know the rights as a renter and get clear on local laws that prevent housing discrimination based on minority status (including LGBTQ+ renters) or source of income (like housing vouchers). 

Takeaways for real estate agents

Since homebuyers tend to be renters first, it makes sense to keep tabs on the rental market and how the cost of renting compares to the cost of buying a home. 

It’s also likely that some of your clients will have college graduates (or college students) in their households, which means they’ll probably be interested in helping them find the best rental options, so they can enjoy a high standard of living and build enough savings to eventually buy a home. Be ready with the information they need. 

You can also use that information to add value when you’re following up with those clients.