BAM Key Details:

  • Research from Zillow and StreetEasy show New York rents increased seven times faster than wages in 2023, putting an extra squeeze on renters’ budgets as housing affordability worsens.
  • Three of the five markets where rents have outpaced wage growth most dramatically since the pandemic are in Florida. 
  • Rents declined in three markets and were outpaced by wage growth in 20 other metros.

New research from Zillow highlights the gap between rent growth and wage growth in the U.S. Nationwide, since 2019, rents have increased 1.5 times faster than wages, according to data from Zillow and StreetEasy

In New York City, the gap is at its widest, with rents growing seven times faster across NYC’s five boroughs.

In the past few years, demand for rentals—particularly among Millennial and Gen Z adults—has met with a nationwide housing shortage, causing rents to increase in many U.S. markets. 

Last year brought an increase in multifamily supply, softening rent growth and giving wages a chance to catch up and even overtake rent growth, which they did nationwide and in nearly half of all major U.S. metros. National wage growth (4.3%) outperformed rent growth (3.4%). 

But while 2023 gave most renters a welcome reprieve, NYC renters experienced the opposite, with the widest gap between rent growth (8.6%) and wage growth (1.2%) in the U.S. 

It is encouraging to see much of the country making even modest progress in the rental affordability crisis. Unfortunately, New York City is heading in the opposite direction. Despite a strong job market in the city, and in some ways because of it, the gap between what a typical renter can afford and the price of rentals on the market is growing. New multifamily buildings coming online has eased competitive pressure in many markets, but in New York City, construction just simply can’t keep up with demand.

Kenny Lee

StreetEasy Senior Economist

Rents vs. wages across the U.S.

In 2023, rents declined year over year in these three major U.S. markets while wages continued to grow:

  1. Austin, TX (-2.3% rent growth vs. 2.4% wage growth)
  2. Portland, OR (-0.2% rent growth vs. 2.9% wage growth)
  3. San Francisco, CA (-0.1% rent growth vs. 2.6% wage growth)

In 20 other metros, rents increased year over year but wages grew at a faster pace. 

Metros where wages grew faster than rents from 2022 to 2023:

  1. San Jose, CA (6.6% wage increase vs. 0.8% rent growth, for a 5.8 point gap)
  2. Houston, TX (8.0% wage increase vs. 2.7% rent growth, for a 5.3 point gap)
  3. Salt Lake City, UT (5.5% wage increase vs 0.8% rent growth, for a 4.7 point gap)
  4. Austin, TX (2.4% wage increase vs -2.3% rent growth, for a 4.7 point gap)
  5. Raleigh, NC (4.9% wage increase vs 1.1% rent growth, for a 3.8 point gap)
  6. San Antonio, TX (3.6% wage increase vs 0.3% rent growth, for a 3.4 point gap)
  7. Portland, OR (2.9% wage increase vs. -0.2% rent growth, for a 3.1 point gap)
  8. Minneapolis, MN (5.6% wage increase vs 2.7% rent growth, for a 2.8 point gap)
  9. Riverside, CA (5.9% wage increase vs. 3.1% rent growth, for a 2.8 point gap)
  10. Charlotte, NC (4.5% wage increase vs. 1.7% rent growth, for a 2.8 point gap)

In the U.S., from 2022 to 2023, wages grew 4.3% while rents increased by 3.4%. 

While wages have outpaced rents in almost half the 50 largest U.S. metro areas in the past year, only six metros have seen wage growth consistently outperform rent growth since before the pandemic. 

Metros where wages have grown faster than rents since 2019 (up to 2023):

  1. San Francisco, CA
  2. San Jose, CA
  3. Houston, TX
  4. Minneapolis, MN
  5. Portland, OR
  6. Milwaukee, WI

Since before the pandemic, wages have increased 20.2% nationwide while rents have grown 30.4%, resulting in a 10.2 percentage point gap. 

Then there’s Florida—home to three of the five markets where rent growth has far outpaced wage growth over the past five years. 

Since the pandemic, when Florida became a favorite migration destination, rents have skyrocketed across the state, worsening affordability as wages struggled to keep up. 

In Miami, where wages have grown slightly faster than the national average, rents have grown 52.6%, marking the most dramatic increase of any U.S. market and leaving a sizable gap between the area’s typical household income and the income needed to comfortably afford the typical rental. 

And since 2019, three of the top five markets where rent growth has outpaced wage growth most dramatically have been popular Florida hotspots: 

10 Metros with the biggest gaps between rent growth and wage growth 2019 to 2023:

  1. Tampa, FL (50.0% rent increase vs 15.3% wage growth, with a 34.7 point gap)
  2. Miami, FL (52.6% rent increase vs 20.4% wage growth, with a 32.2 point gap)
  3. Indianapolis, IN (37.2% rent increase vs 6.6% wage growth, with a 30.6 point gap)
  4. Hartford, CT (35.5% rent increase vs 7.6% wage growth, with a 27.9 point gap)
  5. Jacksonville, FL (36.7% rent increase vs 9.7% wage growth, with a 27.0 point gap)
  6. Atlanta, GA (35.6% rent increase vs 12.2% wage growth, with a 23.4 point gap)
  7. Kansas City, MO (33.3% rent increase vs 10.1% wage growth, with a 23.2 point gap)
  8. Memphis, TN (36.0% rent increase vs 13.1% wage growth, with a 22.9 point gap)
  9. Buffalo, NY (35.5% rent increase vs 12.8% wage growth, with a 22.7 point gap)
  10. Phoenix, AZ (39.1% rent increase vs 16.6% wage growth, with a 22.5 point gap)

Just in the past year, New York City rents grew almost seven times as fast as wages, with a 7.4 percentage point gap between rent growth (8.6%) and wage growth (1.2%). 

10 Metros with the greatest gaps between rent growth and wage growth for 2022 to 2023:

  1. New York City, NY (7.4 percentage point gap)
  2. Boston, MA (6.8)
  3. Cincinnati, OH (6.4)
  4. Buffalo, NY (5.6)
  5. Chicago, IL (5.5)
  6. Cleveland, OH (4.3)
  7. Providence, RI (3.9)
  8. Hartford, CT (3.2)
  9. Memphis, TN (2.5)
  10. Miami, FL (2.4)

Read the full reports on Zillow and StreetEasy for more information, including charts and methodology.