There’s a real issue of rental affordability going on. Renters in August spent an average of 26.4% of their monthly budgets on rent according to Realtor.com’s Monthly Rental Report.
“Rents are significantly higher than in previous years and are taking up a substantial portion of incomes, which are growing at a slower pace than inflation,” said Realtor.com Chief Economist Danielle Hale.
The company surveyed the 50 largest U.S. metros. At the top of the list of least affordable metros were coastal areas, including:
- Miami, where rents accounted for 46.5% of household income
- Los Angeles, at 40.7% of household income
- San Diego, at 37.1%
But, Hale says, there is some light at the end of the tunnel.
Renters were able to follow the best practice of keeping rents under 30% of household income in the majority of large metros in August. Also, national rents didn’t hit a new record-high for the first time in nine months.
The U.S. median rental price declined for the first time since November 2021. It is now $1,771, down from $1,781 in July, according to the data. Rent growth moderated again on a year-over-year basis, down to a single-digit increase (+9.8%) after 13 straight months at a double-digit pace.
But national rents are still 22.8% higher than in August 2020 overall. They’re also higher across all unit sizes:
- Studios are at a median $1,489 ( up 21.2%)
- One-beds are at a median $1,653 (up 22.6%)
- Two-beds are at a median $1,964 (up 23.2%)