Although a city may be seeing rapid job growth, incomes are not keeping up with growing rents and housing costs. A new Investopedia study showed that economic momentum is not always evident in daily life in most places. Solid wages may be available in another metro region, but housing costs have already increased to the point where they negate much of that benefit. Housing may still be reasonably priced in less expensive cities, but there may be less opportunities for employment and income growth.
Financial difficulties are ongoing and looming for many people. As businesses grow, migrate, or adapt to population trends, employment can increase rapidly. However, wages typically change more slowly, particularly in competitive labor markets where companies are not compelled to instantly increase salaries. Housing is even worse behind. It frequently takes years for the housing supply to significantly meet demand because new building is dependent on zoning, funding, site availability, and material costs.
A recent Trust & Will analysis looked at a number of variables, such as house prices, building activity, income patterns, and employment growth among younger people. When compared side by side, it is evident why it is uncommon for a community to have everything—and why it is noteworthy when a city exhibits favorable trends in numerous categories.
Top metros with rapidly-growing job hubs:
- Austin, Texas
- Phoenix
- Boise City, ID
- Jacksonville, FL
The main drivers in these four metro areas are robust employment and economic momentum.
Wage and housing cost trends have benefited from rapid job growth and a consistent supply of new housing in the popular Austin, Texas, metro, whereas Phoenix is experiencing a strong economic foundation of expansion and entrepreneurship, which, when combined with ongoing residential construction, has enabled wage growth and improved housing costs.
Housing supply in Boise has caught up, and prices have slightly decreased from their peak. In the meantime, income and employment growth are still robust. On the other end, Jacksonville, FL, is particularly appealing to younger millennials or first-time homebuyers because job growth and expansion have exceeded housing inflation.
Jobs, income, and housing are trending in a good way in these three notable markets:
- Raleigh, NC
- Charlotte, NC
- Nashville, TN
Raleigh, NC, has a strong economic base because to steady wage growth and comparatively affordable housing costs, while strong GDP growth and a wide range of jobs have supported wage growth in Charlotte, NC. And although current building is only showing moderate increase, house costs are still reasonably priced. Nashville, TN, continues to add jobs at a steady rate, and recent homebuilding has prevented housing costs from rising faster than salaries.
In Denver and Sacramento, CA, pressures on affordability are lessening due to rising wages or an increase in housing supply. While Sacramento is experiencing robust wage growth and increased housing supply, which are helping to counteract larger economic cost pressures, Denver’s ongoing income growth and a cooling housing market have improved affordability relative to prior peaks.
Rather than long-standing, larger cities, the majority of the metropolitan areas on this list are midsized or rapidly expanding cities. This is one of the main reasons these cities’ employment markets have been able to grow without unduly straining the housing market, which would cause prices to rise quickly. Additionally, the Sun Belt region of the U.S. is home to the majority of millennial-friendly cities. This is not always a migration pattern, as the Trust & Will study notes; rather, it shows where the examined economic variables all line up, making these regions ideal for future expansion.
In conclusion, these elements are subtly connected by housing policy and construction activity. More construction put cities in a better position to handle population increase without experiencing skyrocketing housing costs. Although no market achieves this balance perfectly, some have done it more successfully than others.
These cities demonstrate to millennials that favorable trends in employment growth, wages, and housing affordability can coexist. Because there are fewer trade-offs to take into account, decisions tend to feel less pressured in markets where housing, employment, and wages are improving. Purchasing doesn’t necessitate extending your budget to the limit, and renting doesn’t always feel like falling behind. Further, these areas do not, however, ensure affordability or completely remove trade-offs.
Timing is still important, and career advancement and personal wealth are always important. However, when these elements match, millennials may have more freedom to examine cost-of-living trade-offs, career changes, and housing options without having to worry about affordability.
