Los Angeles Rents Decline to 5-Year Low, Still Unaffordable for Grads

Los Angeles rents have decreased to their lowest point in nearly five years as of spring, providing some relief to tenants. However, the city's recent college graduates continue to face significant challenges due to persistent housing costs. By the end of June, the median asking rent in L.A. County had fallen by 3.4%, or $91, to $2,603. This figure represents a level not observed since late 2021 and is approximately 10% below the peak recorded in 2022. Realtor.com economist Jiayi Xu indicated that this recent decline in rents is a direct consequence of a substantial increase in multifamily construction. This surge in supply has exerted downward pressure on asking prices. Despite this overall trend, the housing market for the graduating Class of 2026, looking to secure rentals this summer, presents a less optimistic scenario. Many new graduates are likely to spend more than 30% of their income on a studio apartment, exceeding the widely accepted threshold for rent affordability. To project the entry-level salaries for graduates in L.A. County, Realtor.com economists utilized national salary projections from the National Association of Colleges and Employers. They then applied a 15% geographic premium to account for the higher wage levels typical of the West Coast hub. The analysis specifically examined young professionals with bachelor's degrees in four prominent majors: computer science, business, social science, and communications, as they navigate both the job and housing markets. Following salary adjustments for L.A. market conditions, a computer science graduate is projected to earn an annual salary of approximately $94,000. Graduates with degrees in business, social science, and communications are expected to have more modest starting salaries, estimated at $79,000, $76,000, and $73,000, respectively. To determine the housing expenses for these college-educated entry-level workers, Realtor.com researchers focused on the median asking rent for a studio apartment, which is considered the most probable housing choice for a recent graduate at the beginning of their career. The report highlights that even with the recent dip in rental prices, the affordability gap remains substantial for those entering the workforce with a college degree in Los Angeles.