There's a saying in real estate that money follows people. This can be especially true for young people. Young people come to cities chasing opportunities or a new way of life. Cities, in return, receive the value of these young people who contribute to the economy by working and spending money. A city with younger residents is often on a growth trajectory.
Placer.ai recently released an analysis showcasing what it believes are the rising star metropolitan areas based on where young professionals are moving. These areas may be ones to watch for real estate investors who are always seeking that perfect mix of affordable properties to buy and a large tenant pool.
The data from Niche’s Neighborhood Grades zeroed in on metropolitan areas with populations between 500,000 and 2.5 million that saw increased migration of young people between July 2020 and July 2024.
The six areas are:
City Positive Net Migration
Austin, TX 3.6%
Fayetteville, AR 3.3%
Raleigh, NC 2.6%
Des Moines, IA 1.4%
Oklahoma City, OK 1.1%
Madison, WI 0.6%
It's not surprising to see Austin on this list. The city has enjoyed healthy migration as many people moved to the area seeking tech jobs. The city has rapidly added housing supply to keep up demand, creating an oversupply in the market. The Sunbelt is represented, but it is interesting to see that the Midwest features prominently on this list. The Midwest has started to attract more interest from young professionals drawn by the lower cost of living.
The data found that relocators to these metropolitan areas tend to come from areas with younger, less affluent residents and fewer job and housing opportunities. Austin was rated as the top job market with an A- rating.
"Individuals are moving to markets like Austin, Des Moines, Raleigh, Oklahoma City, Madison and Fayetteville for job and housing reasons,” R.J. Hottovy, Head of Analytical Research at Placer.ai, told Benzinga. “Placer.ai data indicates that these individuals tend to be younger and migrate from trade areas with lower household incomes than the existing population in these markets, making career opportunities and more affordable housing in these markets more attractive."
Housing affordability has become a bigger reason for moving in recent years. Wages have increased modestly but have not kept pace with housing prices. Young professionals looking to the future and hoping to start a family and own a home are looking for places that combine a solid economy with a more reasonable median home price.
Most of the cities on the list have seen a downturn in the housing market. Austin and Raleigh have experienced rapid increases in housing prices over the last several years, but that may be slowing down. Most economists are forecasting modest price growth for 2025, which could provide some relief for those who are ready to buy.
| City | Median Price | Sales year over year | Days On Market |
| Austin, TX | $537,500 | -17.7% | 67 |
| Fayetteville, AR | $374,900 | -14.9% | 18 |
| Raleigh, NC | $440,000 | -22.6% | 21 |
| Des Moines, IA | $219,000 | -7.9% | 20 |
| Oklahoma City, OK | $272,000 | +6.3% | 31 |
| Madison, WI | $408,000 | +14.5% | 40 |
An overview of these major metros using Redfin data shows that home prices remain high, but sales are falling. Not all young professionals are ready to buy homes; some are renting, but the fact that they are seeking out some of these markets may be because they hope to buy in the future.
Rental data from Rent.com gives a window into the cost of renting in these cities. While there is some variation here, these cities are more affordable overall than larger cities.
| City | Rental Range |
| Austin, TX | $1,213 to $1,754 |
| Fayetteville, AR | $880 to $1,315 |
| Raleigh, NC | $1,394 to $1,651 |
| Des Moines, IA | $957 to $1,275 |
| Oklahoma City, OK | $1,000 to $1,314 |
| Madison, WI | $1,467 to $2,164 |
The prevailing wisdom in the past has been that young people seek out big cities like Los Angeles and New York. However, rising costs in those cities may have prompted people to look elsewhere and the proliferation of remote work may also play a role. The mixed-use and walkable developments trend has also made smaller cities more appealing than ever.
Whether you are a real estate investor or just someone looking for their next place to live, lists like this can provide an extra layer of insight into what is making cities attractive. If you are getting ready to buy, now may be the time to start getting your financial picture together. Make sure you understand your credit score and how much you can afford to spend on buying a home.