Rounding out the top five expensive U.S. cities for rentals are Oakland, California, with income requirements of over $177,000, followed by San Francisco at $173,400 and Los Angeles at $158,000.
Apartment Guide studied the top 50 largest cities and determined average rental costs for one- and two-bedroom apartments in each location. The average rent in New York City is a staggering $6,351, compared with $4,700 for Boston and $4,336 for San Francisco. The popular national resource that matches renters with apartments uses the widely-accepted “30 percent rule,” meaning people should spend no more than 30 percent of their income on housing.
“The ‘30 percent rule’ is just a guideline and doesn’t necessarily mean that if you’re not making a huge salary, you can’t afford a place to live in these locations,” Brian Carberry, managing editor of Apartment Guide, told The Epoch Times. “A lot of people actually spend up to 50 percent on housing–it all depends on what they’re looking for and how much they’re willing to allocate for rent.”
Based on the “30 percent rule,” a person making $100,000 should be spending no more than $30,000 a year on rent. That translates to a monthly rental of $2,500. Carberry explained that the salary needed to afford the rentals could also be divided up between a couple or roommates. “A lot of younger people usually rent with roommates so that they are able to afford an apartment—especially if they want to be in a downtown location in a major city,” he said.
With the current U.S. median household salary at $64,944, according to the U.S. Census Bureau, a large percentage of the population may have to look beyond the 15 top U.S. cities to find an affordable apartment. Also included in the top 15 highest rent locales are Seattle, Washington, San Diego, and San Jose, California, with incomes upwards of $150,000 suggested. Chicago comes in with an income of $117,000 followed by the District of Columbia at $113,000.
On the lower end of the $100,000-plus spots are Sacramento, California, Miami, Florida, and Portland, Oregon, all hovering around $105,000 income recommendations.
“I was actually surprised that Portland had such high rents, because that area is typically way less expensive than many locations in California,” admitted Carberry. Portland’s average rental is listed at $2,529 per month.
Affordable Rentals
For renters seeking the best deals, Carberry points to cities in the Midwest or South. In Aurora, Colorado, for example, the average monthly rental is $1,989, where a yearly salary of $79,579 should be able cover the rent. Charlotte, North Carolina, where average rentals are $1,646 per month, requires a yearly income of $65,857. Only Arlington, Corpus Christi, and El Paso, Texas, have rentals available for those earning about $50,000 a year, and Wichita, Kansas, offers the most economical monthly rentals at $719, where $28,741 a year can secure an apartment.“During the pandemic, we did see a lot of migration to the southern cities, which in turn, caused some rental prices to escalate there,” added Carberry. “Still, it’s way cheaper to rent an apartment in Dallas, as compared to New York City.”
The report found that rents in Seattle increased the most from just one year ago—up 45.21 percent with the average rent of $3,614. Conversely, Baltimore rents saw the largest decrease—down 18.81 percent—with a current average of $1,550 per month.
Not surprisingly, said Carberry, the Northeast and California have traditionally been the most expensive regions of the country, which also require the highest salaries to afford rentals. “Coastal areas are always the most popular, which is why you can often get much better rental deals from the Ohio Valley through Texas to Arizona,” he said. “Of course, salaries also tend to be lower in those areas, and overall, a lot of people are really stretching more for their rents.”
A Glimmer of Hope
But there could be a glimmer of good news on the horizon. Newly released data from Dwellsy, the country’s largest home rental listing platform with 13 million residential listings, reveals that some rental prices actually dropped in September.“We’ve seen a pattern across the country where rents are down about $15 per month from last month,” Jonas Bordo, Dwellsy CEO and co-founder told The Epoch Times. “While that’s a small amount, it does represent a decrease for the first time since last year.”
The U.S. median asking rent rose by 27 percent since September 2021. Dwellsy also reports that single-family home rents are driving the overall market.
Bordo credits a slight decline in the levels of household formations for contributing to the decline. “With climbing rents, a lot of younger people are choosing to remain at home with their parents, or continue living with roommates instead of branching out and creating their own households,” he explained.
Currently, noted Bordo, about 70 percent of U.S. rental properties are owned by individuals, with the average person owning two units. The U.S. Census Bureau also estimates that renters currently comprise 36 percent of all U.S. households.
Taking a look at the top cities with the fastest growing rents, Springfield, Missouri, leads the list with a September 2022 median asking rent of $1,590—a 120.8 percent hike since September 2021. Anderson, South Carolina, is second, followed by Harrisburg, Virginia. Greenville, South Carolina, took the fourth spot, and Detroit, Michigan, grabbed the fifth position with a median asking rent of $1,782 per month—an 81.8 percent hike over last September.
“A lot of people are rethinking where they want to live, since many can now work remotely from anywhere,” said Bordo. “Detroit has seen a lot of changes in the last couple of years with new developments and that may be responsible for the significant increase in rents.”
As for the most expensive single-family rental homes, it’s no surprise that all top five locations are in California, with San Jose topping the list with a median asking rent of $3,600 in September. Other regions in the top five list, with similarly priced rents, include Salinas, San Francisco, Santa Barbara, and Los Angeles. Dwellsy’s report also indicates that 35 percent of U.S. rentals are for single-family homes.
Looking ahead to 2023, Bordo predicts a stabilization of rental prices.
“I’m not expecting a steep drop, but I do expect a much slower rate of growth,” he said. “Right now, rents are still outpacing people’s ability to pay.”
