A new report makes grim reading for U.S. renters, finding only 40% make enough money to cover the median asking price for monthly rent. But it suggested the income gap is slightly less severe in metro Atlanta.
According to the report published Monday by real estate brokerage firm Redfin, the typical U.S. household earns about $55,000 a year, or 17% less than the $66,000 needed to make the monthly rent for a median-priced apartment. Redfin said that rent is about $1,650 a month. The firm analyzed three months of median U.S. apartment rents, ending May 31, to reach its conclusions.
In metro Atlanta, the estimated median household income is almost $62,000 a year and the income required to afford a newly listed apartment is about $63,000. That means the median household income is 1.7% less than the amount needed to cover the median asking rent of $1,570.
Perhaps unsurprisingly, renters in metro New York were hit hardest. The typical renters earn about $67,000 a year, or 43% less than the $120,000 they need to afford the median asking rent of about $3,000. The typical renter in Miami earned about 42% less, followed by Boston at 39%, Los Angeles at 36% and Riverside, California at about 31%.
Redfin said the amount Americans need to earn to afford a median apartment is at its highest level since October 2022.
But Redfin’s senior economist Sheharyar Bokhari said rent growth had flattened and was moving at a “snail’s pace” compared to skyrocketing rents that beleaguered Americans during the pandemic.
“As a result, wage growth should continue to outpace rent growth in the coming months, as it has been doing since 2022,” he said in a statement. “That will help narrow the affordability gap for renters. But for a lot of folks, the math still won’t check out. Many U.S. renters are and will remain burdened by the cost of having a roof over their head, and unlike homeowners, they’re not building wealth through rising property values.”
In the Sun Belt, rents are falling because even though there was a spike in pandemic-era construction, demand has shrunk and there are now more vacancies.
Rent burdens were laid bare in a Harvard Joint Center for Housing Studies report on rental housing published earlier this year. It found that almost half of all renters are “moderately cost-burdened” or spending more than 30% of their income on rent and utilities. About a quarter of households were “severely cost-burdened,” or paying more than 50%.
Michael Waller, executive director of housing advocacy group Georgia Appleseed, said that the high cost of rent was hurting both low-income and middle-income families and children, forcing them to choose between staying in their homes or making car payments, paying medical bills or buying groceries.
“Market conditions like these, with exceptionally high rents, push these families into poorly maintained homes with dangerous living conditions,” he wrote in an email.
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