Grad Advice

Rents are more affordable in Houston for college grads than almost any big city in the nation

Now that the school year is over, millions of recent graduates are looking for jobs and places to live, and according to a new study, Houston is one of the country's most affordable markets for these recent grads.

Real estate website Trulia found that two Texas cities are within the top five most affordable rental markets for recent grads, with Dallas ranking No. 2 and Houston coming in at No. 3.

In Houston, 10.4 percent of rental units are affordable to recent grads with the maximum monthly rent payment that would be considered affordable to them as $746.

No. 1 on the list is St. Louis where 18.6 percent of rental units are affordable to that demographic with a maximum affordable monthly rent payment is $666. In Dallas, 14.9 percent of rental units are affordable to recent grads and the maximum affordable rent is $799.

Atlanta and Phoenix came in at No. 4 and No. 5, respectively.

The most expensive cities for college grads are Portland, southern California locales (Riverside-San Bernardino, Orange County and San Diego) and Miami.

To conduct the study, Trulia looked at the portion of rental homes on the site within financial reach of employed college graduates between the ages of 22 and 25 as of May 7. The standard for affordability is whether the total monthly payment, including rental payment and insurance, equals less than 31 percent of the metro area's median income for recent grads.

According to the study, renters in Houston and Dallas might still need a roommate to make the median rental affordable. (In Houston it would take .7 and in Dallas .5; numbers have been rounded up since any fraction of a roommate would count as a whole person.) But that's better than New York (2.6), Miami (2.3) and Los Angeles (2.3), where it would take as many as three roommates to make the median rent affordable.

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renter livability report

New study ranks Houston as one of the worst places for renters in U.S.

Photo by Leo Yao on Unsplash

Houston flopped toward the bottom as one of the worst places for renters in the nation.

Renters looking for a place in Texas that balances affordability, convenience, and quality of life may want to look outside of Houston, which was just named the 144th "best" city to rent in America.

Houston's rental market apparently leaves much to be desired, according to WalletHub's newly released report, "Best & Worst Places to Rent in America." Experts analyzed 182 U.S. rental markets based on 21 relevant metrics, including the difference between rental rates and mortgage payments, rental affordability, the local cost of living, job availability, and more.

Surprisingly, Amarillo was deemed the No. 1 best Texas city for renters, and it ranked 10th nationally. Hot Dallas suburb Plano came in second place statewide and ranks 12th for a second year in a row, leaving Austin in third place and 13th overall (up from No. 31 last year).

The report said Houston has the 120th best quality of life out of all 182 U.S. cities in the report, and the city ranked 127th nationally in the "renter market and affordability" category. Ouch.

WalletHub analyst Chip Lupo said the best cities for renters offer much more than inexpensive housing, a good job market, and recreational activities. For example, rent prices in the top cities cost tenants as little as 15 percent of their income.

"You’ll also have access to robust laws that protect renters, such as limiting deposits to only a month or two of rent," Lupo added.

Houston residents know their city better than a study ever could, so they can decide if the city's renter market isn't up to par. A separate RentCafe study found the city has become a magnet for Gen Z renters searching for good job opportunities, recreation, and good schools. And now that local rent prices are declining, things might be starting to look up for Houston renters.

Though renting can be more cost effective than owning a property, WalletHub said it's not always a better choice.

"The right road to take depends on a variety of factors, including an individual’s or family’s financial means and how well the local real-estate market is doing," the report said. "Like home prices, rental rates can vary significantly by region, state or city."

Other Texas cities that ranked among the top 100 best places to rent in America include:

No. 24 – El Paso
No. 34 – Grand Prairie
No. 37 – Laredo
No. 48 – Brownsville
No. 49 – Arlington
No. 50 – Fort Worth
No. 63 – Corpus Christi
No. 64 – San Antonio
No. 66 – Irving
No. 79 – Garland
No. 81 – Lubbock

wallethub reports rent report renting real estate