Rental prices across the United States have surged rapidly in the past two years. Unfortunately, incomes have failed to match these increases, causing renters to spend a more significant percentage of their earnings on rent than they did before the pandemic. Many renters are struggling to manage their finances due to the increasing rental prices across the country.
According to the Bureau of Labor Statistics (BLS), the average rental price went up by half a percent in September, resulting in a 7.4 percent year-over-year increase in prices. Unfortunately, incomes are not rising at the same rate, which means that many tenants are now spending more of their income on rent. However, the Kansas City Fed has reported that the real estate web platform Zillow has tracked an average rental price increase that is twice as high as that tracked by the BLS. This discrepancy highlights that differences in methodologies can lead to very different stories describing the ongoing fluctuations in the rental market.
Buy/sell, rent/lease residential &
commercials real estate properties.
A look at the fifty largest metropolitan areas
After analyzing the fifty largest rental markets in the United States, we investigated which are comparatively “affordable.” However, affordability is subjective since, for many people, the cost of renting exceeds what they can realistically spend on housing. According to most financial experts, it is recommended that individuals should not spend more than thirty percent of their income on housing, whether it is in the form of rent or mortgage payments. These figures are for single-family homes, and assuming that one only spends a third of their income on their rental payment, these rental prices would require a household to bring in between $4,260 (or $51,120 annually) and $4,826 (or $57,920 annually).
A lack of affordable housing
In Buffalo, which tops the list, the median household income was $42,186 in 2021, just over $10,000 less than the amount needed to spend only thirty percent of one’s income on housing. A similar story can be found across the list. For instance, in Memphis, the median household income is only slightly higher than that seen in Buffalo, $43,981, and based on the average rental price, a family would have to spend closer to forty percent of their income on rent.