The typical U.S. renter has a household income of $54,712. And according to a new Redfin report, that’s 17.3% shy ($11,408 in dollar terms) of the $66,120 required to afford the rent for a median-priced apartment ($1,653).
Only 39% of renters in the U.S. are earning enough to afford a median-priced apartment.
That doesn’t mean they’re not still renting—just that their rent consumes more than 30% of their income, which typically means they’ve got “month at the end of the money” (to coin a phrase that has long since grown stale).
That 30% threshold means a renter’s annual income should be 40 (or more) times their monthly rent.
Redfin’s data is based on its analysis of median apartment asking rents and estimated median incomes for U.S. renter households as of the three months ending May 31, 2024.
Rents are growing at a snail’s pace compared to the rapid increases we saw during the pandemic, and are unlikely to soar again anytime soon. As a result, wage growth should continue to outpace rent growth in the coming months, as it has been doing since 2022. That will help narrow the affordability gap for renters, but for a lot of folks, the math still won’t check out. Many U.S. renters are and will remain burdened by the cost of having a roof over their head, and unlike homeowners, they’re not building wealth through rising property values.
Rent trends and historical context
The amount of income renters need to afford the median-priced apartment has reached its highest level since October 2022—up 0.8% year over year and up 22.9% from May 2019.
Despite that, national rent growth is essentially flat. The median asking rent in May was $1,653, which is just $47 below its record high.
During the pandemic, multifamily construction ramped up, causing a temporary dip in rents. Since then, resilient renter demand and a backlog of new units have stabilized rents and tempered price growth.
Metros with the biggest affordability gaps
New York City tops the list of metros with the biggest gaps between a typical renter’s income and the income needed to afford a median-priced apartment. Miami follows close behind.
Metros with the largest gaps:
- New York, NY (43.5% affordability gap for the typical renter)
- Miami, FL (42.2%)
- Boston, MA (38.7%)
- Los Angeles, CA (36.1%)
- Riverside, CA (30.8%)
Metros with affordable median-priced apartments
Only in five U.S. metros is the median-priced apartment affordable for the typical renter:
- Austin, TX
- Houston, TX
- Phoenix, AZ
- Washington, D.C.
- Dallas, TX
Austin, Phoenix, and Dallas have all experienced rent declines, with Austin rents falling 7.2% year over year, Phoenix rents by 5.5%, and Dallas rents by 1.3%.
Despite being among these five affordable metros, Washington, D.C., has experienced the largest annual rent increase, at 11.1%, putting it further down the list.
Byron Lazine gave a full breakdown of the report on the July 2nd Hot Sheet:
Read the full report for more details, including metro-level data and methodology.
