Top Markets for Residents with a College Degree

The success of a local residential market intuitively relies on the income potential of its residents. When incomes rise, so do rental budgets and the mortgage balances that borrowers can afford. As a predictor of higher incomes, a rising share of an area’s population who hold a college degree is a boon for local housing demand. Here, we explore which metros have seen the largest increase in residents with a college degree over the past decade.

Areas with greater volumes of higher-ed infrastructure and opportunities, such as large states containing one or more major metropolitan areas, start with a natural advantage in this regard. California, New York, and Texas are the leading US states in producing college graduates.

However, recent inter-state migration trends show that while Texas has been a hotspot for new residents since the start of the pandemic, New York and California have achieved the opposite — leading all states in outbound migration. Driven by factors such as affordability, livability, and the diffusion of remote work across the labor market, high-educated households are casting a wider net of geographies as they consider where to plant their roots.

Over the ten years ending in 2022, the overall number of residents in the US who hold a college degree has risen by 36%. Among the top 50 US metros by population, the attraction of Texas and other Sun Belt metros again stands out. Austin saw the most significant increase in residents with a college degree between 2012 and 2022, nearly doubling its total (91%). Notably, the Austin metro registered 16 percentage points ahead of its closest competition — Jacksonville, which still experienced an impressive 75% increase over the past decade.

Although Utah ranks just 20th in total annual college graduates, its capital, Salt Lake City (SLC), has experienced the third largest increase in residents with a bachelor’s degree of any metro area in the nation, rising 69% over ten years. SLC’s trend is a bellwether for metros that may lack the prowess of higher-education infrastructure and outcomes relative to larger metros but have seen an increase in degree-holding residents due to attractive labor market conditions and a more favorable cost-of-living.

Widening the scope beyond the top 50 metros shows two other Texas cities, Laredo and Midland, at the top and reveals the donut effect set in motion in the state.

As population trends continue to favor suburbs over urban cores, large metros such as Houston, Dallas, and Austin continue to perform strongly at attracting degree-holding residents from a birds-eye view, but the substantial 10-year climb for Laredo (from 10,000 to 38,000 residents with a four-year degree) and Midland (from 8,000 to 20,000 residents with a four-year degree) reflect the additional storyline at play throughout the country.

Small cities on the exurbs of larger markets, like Monroe, MI, Yuba City, CA, and St. Georges, UT, have similarly seen significant increases in college-degree-holding residents resulting from the donut effect.

Some medium-sized metros, such as Ashville, NC, which sits on the exurbs of Charlotte, and Bakersfield, CA, the largest metro north of Los Angeles, began the decade in scope with greater numbers and have seen proportionally more modest growth compared to smaller cities. Still, both metros more than doubled their total number of degree-holding residents and have experienced proportionally faster growth in this demographic compared to their closest, largest counterparts.

As degree attainment in the United States has grown over the past decade, local housing, labor, and commercial real estate markets across the country have evolved to accommodate emerging needs. These data show that combined with the donut effect, larger metros in the Sun Belt and smaller metros nationwide have ascended as the biggest winners.