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Have a question? Ask our Home Buying expert.

Have questions? Email Send your question to mlerner@smartasset.com

new college grads

These days having a college education is not enough to ensure a financially secure future. According to data from the Census Bureau, over 30% of Americans over the age of 25 have a bachelor’s degree or a graduate degree. That means college graduates looking to get a professional edge need to move to the right cities. Cities that have plenty of jobs, low mortgage costs and a variety of entertainment options are good fits for new college grads. 

In total we looked at 10 metrics across three categories: jobs, fun and affordability. To measure a city’s job score, we looked at overall unemployment rates, unemployment rates for those with a bachelor’s degree, average earnings for college graduates and the number of job listings on Indeed. For affordability, we looked at cost of living and monthly median rent costs. To measure fun, we looked at the concentration of entertainment and dining establishments, population aged between 20 and 29, the average rating for bars in the area and the average rating for restaurants in the area. Check out our data and methodology to see where we got our data and how we put it together.

This is the 2018 version of this study. Check out the 2017 version here.

Key Findings

  • Midwest is best – Six of our 10 best places for college grads are in the Midwest. These cities tend to combine low costs of living with access to opportunity, which is why they rank so high.
  • Toss up between the coasts – Cities on both the East Coast and West Coast suffer from high costs of living. But both coasts have representatives in our top 25. So if you are a new college graduate looking for a great city on the West Coast, look to San Francisco or Seattle. If you are looking on the East Coast, Boston may be your best option.

best cities for new college grads

1. Columbus, OH

Columbus, last year’s second-best city for new college graduates, ranks as the top landing spot for 2018. This city is most notable for its affordability and access to job opportunities. Columbus’ cost of living is lower than the national average and is 12th-lowest overall in our study. Finding work in this city should be no trouble either. Only 1.5% of bachelor’s degree holders are unemployed in Columbus and overall only 3.8% of workers are unable to find work, regardless of their educational background.

Of course, Columbus wouldn’t take the top spot without good all-around scores. This city is also filled with friend-making opportunities for all the 20-something college graduates. Around 20% of all city residents are between the ages of 20 and 29.

2. Cincinnati, OH

Last’s year top city, Cincinnati, slips down to the second spot for 2018. Cincinnati is an excellent option for recent college grads. For starters, new graduates moving to this city should be able to find affordable housing. According to our data, median rent in Cincinnati is only $570 per month making it one of the most affordable in the country.

To go along with the affordable rent is a low cost of living on other goods. We estimate that living in Cincinnati costs 4% less than the national average. This should leave college graduates in a good position to save for a down payment on their first home or a nest egg for their retirement.

3. Nashville, TN

Music City comes in third. Nashville is one of the most fun cities in our study, which is why it ranks so high. Overall this city scores a 95 out of 100 on our fun index. Most impressive is the high concentration of dining and entertainment establishments in the city. Our data shows that Nashville ranks seventh in that metric.

But Nashville would not rank so highly if it only scored well in one category. Other than the good times available in Nashville, jobs are also relatively plentiful. The city has an overall unemployment rate of 2.7%.

4. Pittsburgh, PA

The Steel City takes fourth. Pittsburgh offers a balance of affordability and fun. This city has the fourth-lowest cost of living in our data set and the fourth-highest percent of residents in their 20s. While the overall unemployment rate in the city is on the high side (4.9%), local college graduates are finding jobs. The unemployment rate for residents with a bachelor’s degree is 2.4%.

5. Milwaukee, WI

Another Midwestern city takes fifth. Milwaukee is a fun city which still manages to be affordable. Overall Milwaukee scores a 66 on our affordability index and an 86 on our fun index. Specifically it scores in the top 30 for concentration of entertainment and dining establishments. What makes Milwaukee so affordable is the availability of low cost rent. Our data shows the median rental costs only $680 per month.

Additionally, it’s a young city, with over 18% of residents aged between 20 and 29.

6. San Antonio, TX

San Antonio is the best landing spot in Texas for college graduates. This city has above-average scores across the board. San Antonio scores in the top 25 in an impressive five metrics. The standout scores are the overall unemployment rate and concentration of entertainment and dining establishments. For those metrics, San Antonio has the 23rd-best score and 21st-best score respectively.

Speaking of restaurants, the eating options around San Antonio are also popular. This city has the 20th-highest average Yelp score for restaurants.

7. Omaha, NE

For college graduates who want to put their head down, get a well-paying job and start saving for the future, Omaha is tough to beat. Only 1.4% of bachelor’s degree holders here are unemployed. In fact, the economic situation across the city is promising. Only 3.2% of residents are unemployed.

Omaha also has an overall cost of living that’s less than the national average and the average rental unit costs only $710 per month.

8. Louisville, KY

Louisville owes its eighth-place ranking to its affordability. Overall the cost of living in this city is only 1% higher than the national average. Plus, data from the Census Bureau shows the median rental in this city costs only $640 per month.

Louisville also gained ground on other cities thanks to the relatively high salaries college graduates in the city earn. The average college graduate in this city earns over $49,000 per year, the highest in our top 10.

9. St. Louis, MO

Missouri’s largest city takes ninth. This is a great city for bachelor’s degree holders to find jobs. The unemployment rate for college graduates in this city is only 2.2%. That is exactly half of the unemployment rate for all workers.

St. Louis’ most impressive score comes in its housing costs. With median rent in cities like Arlington, Virginia and San Francisco costing well over $1,700 per month, the fact that the average rental unit in St. Louis is priced at just over $600 is remarkable. Perhaps it is especially enticing for college graduates looking to pay down student debt.

10. Indianapolis, IN

Indianapolis, another affordable, Midwestern city, closes out the top 10. Overall this city ranks 23rd in affordability, with low rent costs and costs of living roughly equal to the national average.

Median earnings for college graduates in Indianapolis are also quite high. Data from the Census Bureau shows that the average college graduate earns $46,400 per year. That means the average college graduate would only need to dedicate 17.5% of their budget to housing costs if they lived in the average rental unit.

best cities for new college grads

Data and Methodology

In order to find the best cities for new college grads, we looked at the 108 largest cities for which we had data. In total we looked at data on three different categories spread out over 10 metrics. Specifically we looked at the following metrics:

  • Jobs. For this metric, we looked at the unemployment rate for bachelor’s degree holders, the overall unemployment rate, earnings for college graduates and the number of Indeed job listings. The bachelor’s degree unemployment rate and the earnings for college graduates come from the U.S. Census Bureau’s 2016 1-Year American Community Survey. The overall unemployment rate comes from the Bureau of Labor Statistic’s Local Area Unemployment Statistics. The number of Indeed job postings comes from Indeed.com Job Search API.
  • Affordability. For this category, we looked at the median rent in each city and the cost of living as a percentage of the national average. The cost of living numbers come from the MIT living wage calculator. The median rent numbers come from the Census Bureau’s 2016 1-year American Community Survey.
  • Fun. In this metric, we looked at the concentration of entertainment and dining establishments, the percentage of the population ages 20-29 and the Yelp scores of restaurants and bars. The concentration of entertainment and dining businesses comes from the Census Zip Code Business Patterns Survey and represents bars and restaurants as a percentage of all establishments. The population numbers come from the Census’ 2016 1-year American Community Survey. The Yelp scores come from Yelp.com API.

First, we ranked each city for each metric. Then we found each city’s average score in each metric. Using the average scores, we created an index score in each of the three categories. For example, the most affordable city would get a 100 in affordability, the least affordable a 0. To create our overall index we found the average of the three indexes.

Tips for Buying Your First Home

  • Timing is important – For buying to make more financial sense than renting you need to consider how long you plan to live in the home. The math breaks down differently depending on your specific situation, but basically the longer you live in a home the more sense it makes to buy vs. rent. For this reason, it is a good idea to be fully settled in a city before you buy your home. If you are still early in your career and place a good amount of emphasis on mobility, it may be best to continue renting vs buying.
  • Start saving now – Even if you have no current plans on buying a home, you may want to start saying for a down payment sooner rather than later. This way when you are ready to buy a house you will already have done most of the heavy lifting when it comes to your 20% down payment. In some of the nation’s biggest cities, it may take years of saving to be able to afford a down payment.
  • The extras can puncture a budget – When it comes to buying a home there are long-term costs to keep in mind other than just your mortgage. Property taxes and homeowners insurance for example are two costs you must be aware of when buying a home. This is especially true in states like New Jersey or Illinois where property taxes are particularly high.

Questions about our study? Contact us at press@smartasset.com.

Photo credit: ©iStock.com/jacoblund

Derek Miller, CEPF® Derek Miller is a graduate of the University of Edinburgh where he studied economics. He is passionate about using data to help people make better financial decisions. Derek is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society of American Business Editors and Writers. He is a data journalist whose expertise is in finding the stories within the numbers. Derek's writing has been featured on Yahoo, AOL, and Huffington Post. He believes the biggest financial mistake people make is waiting too late to save for retirement and missing out on the wonders of compounding interest. Derek lives in Brooklyn.
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