Realtor.com® February Rental Report: Many Americans Are Spending More Than They Can Afford on Rent
The least affordable metros where people spend more than 30% of their salary on rent are: Miami, Los Angeles, New York, San Diego, Riverside, Calif., Boston, Orlando and Tampa
SANTA CLARA, Calif., March 21, 2023 /PRNewswire/ — While inflation has begun to ease slightly, one area continues to become less affordable for Americans – paying the rent. The Realtor.com® found that despite a slight decrease in rent prices, affordability continued to get worse in 26 major metros.
In February, the median rent in the 50 largest metros declined to $1,716, down $1 from last month and $48 from the peak. However, rents are still up 3.1% from one year ago, making rental payments less affordable. Renters earning the typical household income dedicated 25.3% of their income to lease a typical for-rent home, up from 24.8% a year ago.
“The general rule of thumb is that you shouldn’t spend more than 30% of your income on housing, but the data shows that in eight of the 50 largest metros, many renters are doing just that,” said Realtor.com® Chief Economist Danielle Hale. “Slowing rental price growth is a positive for renters, but it’s important to put this in context. This means that affordability is worsening at a slower pace in many markets; it’s not getting better.”
The pace of rent growth has slowed for the past 13 months and experienced single-digit growth for the past seven months. Despite this, rent prices are still $296 (20.8%) higher than the same time in 2020 (pre-pandemic).
Least affordable rental markets in Feb. 2023:
- – $2,349 or 42.3% of income
- – $2,864 or 39.2% of income
- – $2,895 or 37.5% of income
- – $2,844 or 36.6% of income
- – $2,145 or 32.5% of income
- – $2,829 or 32.0% of income
- – $1,769 or 31.1% of income
- – $1,691 or 31.1% of income
Head inland to find affordability
All eight of the most rent-burdened metros are located along the coast with Fla. (three markets) and Calif. (three markets) leading the pack. On the other hand, the American Heartland led the way in terms of affordability. Oklahoma City, Okla. was the most affordable rental market in February with residents paying 17.4% of income on rent, followed by Columbus, Ohio (18.2%), Minneapolis, Minn. (19.0%), Cincinnati, Ohio (19.4%), and Kansas City, Mo. (19.8%).
“While these American Heartland markets still offer relative affordability, they are not immune to price hikes. As we saw in the these markets are experiencing some of the fastest year-over-year price growth in the country,” said Hannah Jones, economic research analyst, Realtor.com®. “Before signing a lease, it’s important to take a good look at your monthly income and expenses and make sure that the payments won’t stretch your budget too much.”
Rental Data – 50 Largest Metropolitan Areas – Feb. 2023
|
Metro |
Overall Median |
Overall Rent YY |
Feb. 2023 Rent |
Feb. 2022 Rent |
|
$1,668 |
-1.3 % |
24.5 % |
25.5 % |
|
|
$1,644 |
-2.0 % |
21.7 % |
22.1 % |
|
|
$1,817 |
2.6 % |
23.3 % |
23.4 % |
|
|
$1,213 |
9.4 % |
22.2 % |
20.4 % |
|
|
. |
$2,829 |
6.8 % |
32.0 % |
30.6 % |
|
. |
NA |
NA |
NA |
NA |
|
. |
$1,570 |
1.3 % |
25.4 % |
25.4 % |
|
$1,818 |
5.2 % |
26.2 % |
24.9 % |
|
|
$1,233 |
8.6 % |
19.4 % |
18.4 % |
|
|
$1,167 |
-0.4 % |
22.2 % |
22.3 % |
|
|
$1,175 |
4.1 % |
18.2 % |
18.2 % |
|
|
$1,532 |
0.7 % |
22.5 % |
22.5 % |
|
|
$1,893 |
0.6 % |
23.4 % |
23.6 % |
|
|
$1,341 |
8.0 % |
22.9 % |
21.3 % |
|
|
NA |
NA |
NA |
NA |
|
|
$1,388 |
3.4 % |
22.4 % |
21.5 % |
|
|
$1,325 |
11.8 % |
22.1 % |
20.0 % |
|
|
$1,465 |
1.2 % |
24.1 % |
23.9 % |
|
|
$1,279 |
6.4 % |
19.8 % |
18.9 % |
|
|
$1,572 |
-3.9 % |
27.5 % |
28.0 % |
|
|
$2,864 |
0.9 % |
39.7 % |
39.2 % |
|
|
$1,226 |
7.2 % |
21.4 % |
20.3 % |
|
|
$1,302 |
3.5 % |
24.7 % |
24.8 % |
|
|
$2,349 |
3.7 % |
42.3 % |
40.2 % |
|
|
$1,552 |
7.2 % |
25.7 % |
24.1 % |
|
|
$1,487 |
2.9 % |
19.0 % |
18.8 % |
|
|
$1,557 |
-0.8 % |
24.0 % |
24.1 % |
|
|
NA |
NA |
NA |
NA |
|
|
$2,895 |
12.2 % |
37.5 % |
33.4 % |
|
|
$980 |
10.9 % |
17.4 % |
15.9 % |
|
|
$1,769 |
3.2 % |
31.1 % |
29.7 % |
|
|
$1,814 |
1.8 % |
26.2 % |
26.2 % |
|
|
$1,571 |
-3.9 % |
24.1 % |
25.7 % |
|
|
$1,452 |
7.6 % |
24.9 % |
23.1 % |
|
|
$1,738 |
5.0 % |
23.6 % |
22.6 % |
|
|
NA |
NA |
NA |
NA |
|
|
. |
$1,510 |
0.4 % |
20.5 % |
20.5 % |
|
$1,442 |
4.6 % |
22.0 % |
21.9 % |
|
|
$2,145 |
-2.0 % |
32.5 % |
33.6 % |
|
|
. |
NA |
NA |
NA |
NA |
|
$1,875 |
-1.2 % |
26.2 % |
26.7 % |
|
|
$1,346 |
5.4 % |
23.4 % |
22.2 % |
|
|
$2,844 |
3.0 % |
36.6 % |
35.4 % |
|
|
$2,896 |
0.5 % |
27.1 % |
27.1 % |
|
|
$3,309 |
5.9 % |
26.8 % |
25.9 % |
|
|
$2,058 |
0.9 % |
23.2 % |
23.3 % |
|
|
$1,307 |
7.6 % |
20.8 % |
19.8 % |
|
|
$1,691 |
-2.0 % |
31.1 % |
31.7 % |
|
|
. |
$1,415 |
4.2 % |
21.9 % |
21.8 % |
|
. |
$2,116 |
5.1 % |
21.5 % |
20.9 % |
Methodology Overview*
Rental data as of February for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). With the release of its February rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. As a result of these changes, the rental data released since February 2023 will not be directly comparable to previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
Rental affordability analysis: The affordable monthly rent is calculated by applying the 30% rule to the estimated 2023 monthly median household income nationwide ($6,793 across the 50 largest US metros, on average) and in each metro. The monthly median household income is derived from the annual median household income data sourced from Claritas. Due to the methodology changes noted, Realtor.com has made historical revisions to its prior affordability analyses. For our most recently published affordability analysis on August 2022 data published in September 2022, the national rent-to-income share has been updated to 26.2%.
*See report for fully detailed methodology
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
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SOURCE Realtor.com