Renters Must Earn $63,680 to Afford US Homes, Lowest in Nearly 3 Years

A for-sale sign outside a home in Irvine, Calif., on Sept. 21, 2020. John Fredricks/The Epoch Times

Renting a home in the United States is at the cheapest level in nearly three years, with Texas metros Austin, Dallas, and Houston being the most affordable, according to real estate brokerage Redfin.

“Renters need to earn $63,680 to afford the median asking rent for a U.S. apartment ($1,592), the lowest amount needed since March 2022,” a Jan. 22 statement from the company reads. “That’s down 0.4 percent from a year ago and a drop of 6.4 percent from August 2022 when the median asking rent hit an all-time high of $1,700. Back then, a renter would have had to earn $68,000 to afford the typical apartment—nearly $5,000 more than today.”

In 15 out of 44 tracked metros, median-earning renters earned more than what was needed to afford the median rent—the number is up from seven metros a year back.

Austin was found to be the most affordable metro for renters, where people earned upward of 25 percent more than what is required to afford a typical apartment. This was followed by Houston and Dallas.

The most unaffordable metro was Providence, Rhode Island, followed by Miami and New York City.

People’s incomes have also improved, boosting rental affordability, the brokerage said. A renter’s estimated median income was $40,505 before the COVID-19 pandemic. This rose by more than 35 percent to $54,752 last year.

Redfin Senior Economist Sheharyar Bokhari said rental affordability in the United States “will continue improving this year, as wages grow and rents remain flat, thanks to the recent boom in apartment construction.”

“The affordability gap between renting and buying is likely to widen further in 2025, as home prices rise and mortgage rates remain high. That means potential homebuyers—especially from younger generations—may decide to continue renting for longer, as it’s the only affordable option.”

According to a report by real estate marketplace Zillow, rents for single-family properties were 20 percent higher than for multifamily units as of December—the “greatest disparity” between the two since 2018.

Zillow anticipates rental concessions in the multifamily market to continue this year. As for single-family units, any rise in rent prices will ultimately depend on the direction of mortgage rates, its report stated. “But with limited construction of single-family rentals on the horizon, this segment of the market will likely stay tight.”