One of the most important features of a successful real estate market for buying rental properties is job growth. Why? Well, strong economies that grow at a constant rate and have lower unemployment rates are considered the best places to live. This attracts new migrants, meaning the demand for rentals is always increasing. As a result, this lowers vacancy rates and increases rent prices. From a real estate investor’s point of view, this leads to high monthly rental income and a good rate of return on a rental property. Additionally, current and future economic growth in a market translate into a stable real estate appreciation rate. This means you can expect investment properties to bring a good ROI over the long term. As you can tell, the fact that the best job markets are also the best places to invest in real estate is not a coincidence.
Job Growth in the United States
At the beginning of 2020, the US economy was thriving with job gains beating expectations, wages growing above 3%, and unemployment rates remaining near historic lows. However, this changed with the coronavirus battering nearly every business sector, costing about twenty million jobs and raising the unemployment rate nationally. Naturally, this had taken a toll on the US housing market. Fortunately, however, the job market is starting to recover as all US states are reopening non-essential businesses. According to WalletHub, the US unemployment rate now sits at 13.3%, compared to the nearly historic high of 14.7% at the peak of the COVID-19 pandemic.
Just like all real estate market trends, however, job growth is local and is not the same in every state across the country. Right now you must be asking: so where are the best job markets in the US that are bouncing back from the effect of the coronavirus? In this article, we list the 10 fastest-growing job markets which endured the pandemic better than others according to WalletHub. To identify these hot job markets, the company considered each state’s overall unemployment rate as of May 2020. Then, they compared the change in each state’s unemployment rate to May 2019 and January 2020 to reveal the impact since last year and since the beginning of this year.
Based on this analysis, WalletHub found that the following are the best job markets in America. To show that these are also some of the best places to buy rental property, we took a look at our data for each state. Mashvisor’s real estate investment software helps investors make faster and smarter decisions based on market-level as well as property-level data. For the states below, we provide a glimpse of this data including the median property price, price to rent ratio, the rental income you can expect to earn per month, and more. You can get access to even more data like cap rates, cash on cash return, and Airbnb data when you sign up with Mashvisor. To learn more about our product, click here.
So without further ado, here are the states with best job markets in the US:
#1 Nebraska
The rate of job loss in Nebraska hasn’t been as fast as the national average. This is mainly because Nebraska has a smaller share of employment in several hard-hit industries. For example, the state has less employment in travel and tourism and is not focused on oil production. Instead, a large share of employment in Nebraska is in the essential industries like food production and industries like finance and insurance, where it’s possible to work from home. The unemployment rate in Nebraska is currently 5.1%. This is up 74% from May 2019 and 61.7% from January 2020.
Here are Mashvisor’s data for the Nebraska real estate market:
- Median Property Price: $278,955
- Price Per Square Foot: $139
- Average Days on Market: 76
- Price to Rent Ratio: 20
- Monthly Rental Income: $1,144
#2 District of Columbia
The District of Columbia’s economy is diversified with professional, business service, and federal government being the most prominent sectors. The best jobs in government pay well and support a large housing market. However, most government jobs have lower salaries. Combining that with high property prices in DC explains why the rental market continues to grow here. DC rental properties generate the highest monthly rental income in this list, making it one of the best job markets for investors. The unemployment rate in the District of Columbia is 8.5%. This is 54.3% higher than May 2019 and 55.9% higher than January 2020.
Here are Mashvisor’s data for the District of Columbia housing market:
- Median Property Price: $729,436
- Price Per Square Foot: $541
- Average Days on Market: 72
- Price to Rent Ratio: 23
- Monthly Rental Income: $2,602
#3 Arizona
Arizona has always been one of the states with the best job market, and 2020 is no exception. As a matter of fact, the state has one of the best job markets in the next 5 years. Last year, Arizona’s job market witnessed overall growth thanks to the growth in education and health services, trade, and utilities, to name a few. As the job market is starting to recover from the effects of the pandemic, the state will continue to bring more people which strengthens the real estate market. The unemployment rate in Arizona now is 8.7%. This is 91.4% up from May 2019 and 84.3% up from January 2020.
Here are Mashvisor’s data for the Arizona housing market:
- Median Property Price: $452,570
- Price Per Square Foot: $206
- Average Days on Market: 105
- Price to Rent Ratio: 20
- Monthly Rental Income: $1,854
#4 New Mexico
New Mexico’s real estate market has shown good growth in recent times, mainly because of the state’s economic growth. Employment in the education and health care sectors is projected to grow faster than most other industries, providing the largest number of job openings and higher-paying occupations. There are a number of cities in New Mexico that can provide good returns for real estate investors – which you can find and analyze on Mashvisor. New Mexico’s unemployment rate is 8.8% as of May 2020. This is 86.9% higher from May 2019 and 64.5% up from January 2020.
Here are Mashvisor’s data for the New Mexico housing market:
- Median Property Price: $391,674
- Price Per Square Foot: $179
- Average Days on Market: 136
- Price to Rent Ratio: 23
- Monthly Rental Income: $1,404
#5 Montana
Next up on our list of the best job markets in the US is Montana. While the state’s economy is traditionally grounded in agriculture, other industries including the high-tech sector have been experiencing high growth rates. Compared to the national average, Montana has a relatively low unemployment rate. Real estate investors will also be happy to know that home prices in the state have on the rise and are projected to continue to do so, which is increasing the demand for rental properties. Montana’s unemployment rate is 8.5% according to WalletHub. This is 190.7% up from May 2019 and 87.0% from January 2020.
Here are Mashvisor’s data for the Montana housing market:
- Median Property Price: $517,283
- Price Per Square Foot: $249
- Average Days on Market: 139
- Price to Rent Ratio: 31
- Monthly Rental Income: $1,348
#6 Connecticut
When it comes to Connecticut, it also has a diverse economy driven by sectors such as agriculture, insurance, technology, finance, and manufacturing. It is also home to 17 Fortune 500 companies. This strong job market is attracting top talent from across the country – all of whom will need housing. Seeing that home prices are well above the national average, Connecticut enjoys a strong rental market. Mashvisor’s data show that monthly rental income here is the second-highest on the list! The unemployment rate in Connecticut is now 9.3%. This is up 141.7% from May 2019 and 92.8% from January 2020.
Here are Mashvisor’s data for the Connecticut housing market:
- Median Property Price: $504,736
- Price Per Square Foot: $219
- Average Days on Market: 105
- Price to Rent Ratio: 18
- Monthly Rental Income: $2,336
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#7 Wyoming
Wyoming’s job market is experiencing steady growth and the robust economy continues to attract a talented workforce. Besides being one of the best job markets in America, there are many other benefits of buying an investment property in Wyoming. For one, it’s one of the states with no property tax and no income tax. In addition, low crime rates have also contributed to the state’s high population growth rate. The unemployment rate in Wyoming is currently 8.7% – up by 163.9% from May 2019 and 102.0% from January 2020.
Here are Mashvisor’s data for the Wyoming real estate market:
- Median Property Price: $684,125
- Price Per Square Foot: $331
- Average Days on Market: 134
- Price to Rent Ratio: 37
- Monthly Rental Income: $1,533
#8 Arkansas
Still unsure where to invest in real estate? Consider Arkansas which has much to offer in terms of jobs. The state is home to six Fortune 500 companies and enjoys a robust economy driven by industries like agriculture. CNBC ranked Arkansas as the 20th best state in America for business due to low real estate and construction costs. In fact, Arkansas has the 5th lowest cost of living, making it an affordable housing market filled with good investment opportunities. What’s more, it’s also of the states with the lowest mortgage rates and has no property tax! Arkansas’ unemployment rate is 9.4%. This is up 175.7% from May 2019 and 127.0% from January 2020.
Here are Mashvisor’s data for the Arkansas housing market:
- Median Property Price: $269,944
- Price Per Square Foot: $144
- Average Days on Market: 144
- Price to Rent Ratio: 20
- Monthly Rental Income: $1,117
#9 Idaho
The Gem State, as its name suggests, is famous for its gemstones. However, Idaho offers plenty of gems for investors when it comes to real estate investment as well. Tourism, business, and technology are among the strongest sectors in Idaho. As more tech companies are starting up or expanding in the state, Idaho is becoming one of the best IT job markets. The state is also experiencing a sharp rise in federal employment. All of this means a growing population and high demand for rental properties. The unemployment rate in Idaho is 8.6%. This is up 233.8% from May 2019 and 144.4% from January 2020.
Here are Mashvisor’s data for the Idaho real estate market:
- Median Property Price: $517,046
- Price Per Square Foot: $238
- Average Days on Market: 88
- Price to Rent Ratio: 32
- Monthly Rental Income: $1,328
#10 Maryland
The last in the list of best job markets in the US is Maryland which also ranks amongst the richest states in the US as well. Maryland’s economy is driven by many industries including bio-health and life sciences, IT and cyber-security, advanced manufacturing, in addition to aerospace and defense. It’s also home to over 60 federal agencies and has the 4th highest percentage of federal workers across the country. All of this is spurring job growth in high-paying positions, which has led to a spike in demand for rentals. Mortgage rates are also among the lowest here. Maryland’s unemployment rate now is 9.7%. This is up 170.4% from May 2019 and 158.6% from January 2020.
Here are Mashvisor’s data for the Maryland real estate market:
- Median Property Price: $417,406
- Price Per Square Foot: $199
- Average Days on Market: 103
- Price to Rent Ratio: 19
- Monthly Rental Income: $1,816
Are you ready to start searching for your next investment property in the states with the best job markets? Mashvisor’s tools will turn your 3-months’ search into 15 minutes! To start looking for and analyzing the best rental properties for sale in your state, city, and neighborhood of choice, start your 7-day free trial with Mashvisor now!