Realtor.com® February Rental Report: Affordability Issues Rise as National Rents Reach 30% of Americans’ Incomes

Mar 23rd, 2022 6:00 EST

In February, national rents grew 17.1% year-over-year to a new high of $1,792 per month, representing a higher share of household incomes (29.7%) than in 2021 (24.8%)

SANTA CLARA, Calif., March 23, 2022 /PRNewswire/ — New rental data shows affordability issues are on the rise, as Americans spent 30% of their monthly budgets on rents in February on average, according to the Realtor.com® Monthly Rental Report released today. February rents accounted for an even higher portion of household incomes in 14 of the 50 largest U.S. markets, with the list of least affordable areas dominated by Sun Belt metros like Miami, Tampa, Fla. and San Diego, Calif.

In February, the U.S. median rental price hit a new high of $1,792 and soared by double-digit percentages (+17.1% year-over-year) for the seventh month in a row. Among unit sizes, studio rents increased at the fastest annual pace, up 17.1% (+$215) to a median of $1,474. Larger unit rents also posted double-digit gains over February 2021: 1-bedrooms, up 16.4% (+$232) to $1,648; and 2-bedrooms, up 16.2% ($278) to $2,002.

“Whether it’s rent or mortgage payments, the general rule of thumb is to keep monthly housing costs to less than 30% of your income. And with rents surging nationwide, February data indicates that many renters’ budgets may be stretched beyond the affordability limit,” said Realtor.com® Chief Economist Danielle Hale. “With rents up by nearly 20% over the past two years, rental prices are likely to remain high, but we do expect some cooling from the recent accelerated pace. In light of mounting economic uncertainties and the conflict in Ukraine, some households will prefer to buy, in an effort to lock-in a largely fixed monthly payment as a hedge against further inflation. But fast-rising mortgage rates and still-limited numbers of homes for sale could mean some would-be buyers may stick with the flexibility of renting. With rental demand already outmatching supply, rental affordability will remain a challenge. For renters eager to make the transition to first-time buying, finding a relatively affordable rental is key to saving for a downpayment. Tools like the Realtor.com® Rent vs. Buy Calculator can help you frame the numbers in a meaningful way and make the choice that is right for you.”

February 2022 Rental Metrics – National

Unit Size

Median Rent

Change over Feb. 2021

Change over Feb. 2020

Overall

$1,792

17.1% ($261)

18.8% ($283)

Studio

$1,474

17.1% ($215)

11.7% ($154)

1-bed

$1,648

16.4% ($232)

17.1% ($241)

2-bed

$2,002

16.2% ($278)

21.2% ($350)

Affordability issues soar nationwide, led by Sun Belt metros February data indicates that rents are increasingly straining Americans’ budgets, representing roughly 30% of typical household incomes. Year-over-year rent growth in February 2022 was four-times higher when compared to March 2020, before the onset of COVID, highlighting limited supply relative to demand. The acceleration in rents is largely driven by a growing segment of young households, many of whom are turning to renting in the face of the for-sale inventory crunch, record-high listing prices and climbing mortgage rates. In turn, many of the least affordable rental markets are also some of the most competitive areas for buying. These trends are illustrated in Sun Belt metros like Miami, Tampa and San Diego, which topped February’s lists of fastest-growing and least affordable rental markets, as well as the hottest homebuying destinations.

  • February rents made up 29.7% of the typical household income in the 50 largest U.S. metros, a higher share than during the same month in 2021 (25.3%). The rental share of income was even greater in 14 of these markets, led by Miami, at 59.5%; Los Angeles, at 46.0%; and Riverside, Calif., at 45.9% (see table below).
  • Representing nearly half of the country’s largest markets, the Sun Belt claimed half of February’s least affordable areas and all 10 of the fastest-growing rental markets, including four in Florida. The state’s low vacancy rates highlight rising rental affordability, with the Florida supply of vacant rental units (6.6%) declining drastically since 2009 (17.9%).
  • In Miami, the median rental price spiked 55.3% year-over-year in February, bringing it to the top of February’s least affordable markets. Although buying a starter home is more affordable than renting one in Miami, the local for-sale home market is also exploding. Compared to February 2021, listing prices were up 31.6% in Miami, which jumped 25 spots on the latest Realtor.com® Hottest Markets Ranking.

Least Affordable Rental Markets (Feb. 2022)

Rank

Metro Area

Median Rent

Rental Share of Income

Rental Share

of Income YoY

Maximum Affordable Rent

1

Miami, Fla.

$2,929

59.5%

37.8%

$1,476

2

Los Angeles, Calif.

$2,993

46.0%

39.1%

$1,952

3

Riverside, Calif.

$2,678

45.9%

40.5%

$1,752

4

Tampa, Fla.

$2,098

44.7%

33.1%

$1,407

5

San Diego, Calif.

$3,008

42.9%

35.0%

$2,105

6

New York, N.Y.

$2,725

40.9%

36.7%

$1,997

7

Las Vegas, Nev.

$1,600

39.6%

30.9%

$1,213

8

New Orleans, La.

$1,725

37.2%

32.5%

$1,392

9

Orlando, Fla.

$1,843

36.7%

26.8%

$1,506

10

Phoenix, Ariz.

$1,855

34.7%

27.9%

$1,628

11

Sacramento, Calif.

$2,029

31.8%

28.6%

$1,912

12

Memphis, Tenn.

$1,385

31.4%

25.3%

$1,324

13

Cleveland, Ohio

$1,378

30.7%

29.2%

$1,345

14

San Francisco, Calif.

$2,970

30.5%

28.2%

$2,921

Middle America rental markets offer relative affordabilityAlthough rental affordability is dwindling at the national level, February data offers some good news for some renters, depending on where they live. In many large markets in Middle America, for instance, February rents came in below the recommended max share of monthly paychecks. Additionally, the area accounted for more than half of February’s most affordable rental markets, including Kansas City, Oklahoma City and St. Louis. Still, with February rent growth outpacing incomes even in these relatively affordable areas, renters devoted more of their monthly paychecks towards housing costs than in 2021.

  • After making a swift recovery from earlier COVID setbacks, rents grew over 2021 in each of the 50 largest U.S. metros in February, up by double-digits in 39 markets. February rent growth was in single-digit territory in the remaining 11 metros, keeping rental costs to a lower share of incomes in many of these areas.
  • At No. 8 on the February list of most affordable rental markets, Minneapolis posted the country’s second lowest annual rental price gains, up just 4.5% year-over-year. Compared to a metro like Miami, where rental affordability has dropped dramatically, Minneapolis rents were significantly lower in February ($1,558 vs. $2,929).
  • In February, Middle America dominated the top 10 list of most affordable rental markets, with rents taking up less than 30% of typical household incomes in metros like Kansas City, at 19.9%; Oklahoma City, at 21.1%; and St. Louis, at 22.3%.
  • At the same time, with housing affordability declining and mortgage rates climbing nationwide, Middle America renters might consider putting their monthly savings on rent towards buying a first home. In the No. 1 most affordable rental market of Kansas City, monthly starter home costs were 21.7% lower than rents in January, but also grew double-digits over 2021.

Most Affordable Rental Markets (Feb. 2022)

Rank

Metro Area

Median Rent

Rental Share of Income

Rental Share

of Income YoY

Maximum Affordable Rent

1

Kansas City, Mo.

$1,216

19.9%

18.2%

$1,832

2

Oklahoma City, Okla.

$923

21.1%

19.0%

$1,314

3

Denver, Colo.

$1,921

21.9%

19.0%

$2,631

4

St. Louis, Mo.

$1,299

22.3%

20.7%

$1,749

5

Washington, D.C.

$2,078

22.7%

20.4%

$2,746

6

Indianapolis, Ind.

$1,215

23.0%

20.7%

$1,587

7

Louisville, Ky.

$1,200

23.0%

20.5%

$1,564

8

Minneapolis, Minn.

$1,558

23.0%

22.1%

$2,028

9

Houston, Texas

$1,420

23.4%

21.1%

$1,823

10

Raleigh, N.C.

$1,561

23.5%

19.9%

$1,990

January 2022 Rental Metrics – 50 Largest U.S. Metros*

Metropolitan Statistical Area

Overall Median Rent

Overall Rent YoY

Studio Median Rent

Studio Rent YoY

1-br Median Rent

1-br Rent YoY

2-br Median Rent

2-br Rent YoY

Atlanta-Sandy Springs-Roswell, Ga.

$1,812

19.6%

$1,684

19.3%

$1,685

19.7%

$2,000

18.7%

Austin-Round Rock, Texas

$1,773

28.1%

$1,420

20.8%

$1,630

28.7%

$1,925

24.4%

Baltimore-Columbia-Towson, Md.

$1,770

13.5%

$1,479

12.3%

$1,699

15.6%

$1,850

10.8%

Birmingham-Hoover, Ala.

$1,185

9.2%

$1,040

6.9%

$1,117

5.3%

$1,258

11.7%

Buffalo-Cheektowaga-Niagara Falls, N.Y.

$1,295

10.0%

$1,095

46.0%

$1,158

12.2%

$1,390

6.1%

Charlotte-Concord-Gastonia, N.C.-S.C.

$1,621

19.7%

$1,481

21.6%

$1,528

19.5%

$1,777

17.3%

Chicago-Naperville-Elgin, Ill.-Ind.-Wis.

$1,817

10.1%

$1,328

3.1%

$1,811

13.2%

$2,000

4.7%

Cincinnati, Ohio-Ky.-Ind.

$1,395

7.8%

$1,133

9.5%

$1,346

9.1%

$1,508

3.4%

Cleveland-Elyria, Ohio

$1,378

6.0%

$965

7.9%

$1,319

6.5%

$1,500

8.7%

Columbus, Ohio

$1,249

11.7%

$1,028

3.6%

$1,157

10.9%

$1,358

9.7%

Dallas-Fort Worth-Arlington, Texas

$1,610

20.2%

$1,353

19.5%

$1,475

22.9%

$1,900

21.9%

Denver-Aurora-Lakewood, Colo.

$1,921

15.7%

$1,612

16.6%

$1,801

15.4%

$2,241

17.7%

Detroit-Warren-Dearborn, Mich.

$1,373

4.2%

$1,074

3.3%

$1,147

4.7%

$1,500

1.9%

Hartford-West Hartford-East Hartford, Conn.

$1,648

13.3%

$1,480

36.8%

$1,488

8.6%

$1,888

15.6%

Houston-The Woodlands-Sugar Land, Texas

$1,420

13.8%

$1,308

13.3%

$1,295

15.9%

$1,598

14.4%

Indianapolis-Carmel-Anderson, Ind.

$1,215

10.9%

$1,040

11.2%

$1,117

8.3%

$1,349

12.5%

Jacksonville, Fla.

$1,570

24.9%

$1,155

7.0%

$1,455

23.1%

$1,708

26.5%

Kansas City, Mo.-Kan.

$1,216

11.1%

$1,029

8.9%

$1,077

11.8%

$1,401

11.8%

Las Vegas-Henderson-Paradise, Nev.

$1,600

25.1%

$1,254

8.1%

$1,505

29.4%

$1,716

26.8%

Los Angeles-Long Beach-Anaheim, Calif.

$2,993

20.1%

$2,218

19.9%

$2,751

24.3%

$3,402

17.4%

Louisville/Jefferson County, Ky.-Ind.

$1,200

12.2%

$1,009

4.6%

$1,105

10.3%

$1,350

10.0%

Memphis, Tenn.-Miss.-Ark.

$1,385

24.2%

$1,248

23.4%

$1,319

23.3%

$1,507

28.9%

Miami-Fort Lauderdale-West Palm Beach, Fla.

$2,929

55.3%

$2,420

51.2%

$2,570

53.2%

$3,248

49.9%

Milwaukee-Waukesha-West Allis, Wis.

$1,505

9.0%

$1,195

7.4%

$1,402

6.9%

$1,740

11.5%

Minneapolis-St. Paul-Bloomington, Minn.-Wis.

$1,558

4.5%

$1,222

2.6%

$1,465

4.3%

$1,895

4.1%

Nashville-Davidson–Murfreesboro–Franklin, Tenn.

$1,690

20.9%

$1,709

24.1%

$1,575

20.2%

$1,818

20.4%

New Orleans-Metairie, La.

$1,725

11.3%

$1,400

12.0%

$1,508

2.2%

$1,965

8.2%

New York-Newark-Jersey City, N.Y.-N.J.-Pa.

$2,725

11.5%

$2,500

25.0%

$2,482

5.7%

$3,013

8.0%

Oklahoma City, Okla.

$923

8.8%

$800

18.5%

$850

10.5%

$998

10.9%

Orlando-Kissimmee-Sanford, Fla.

$1,843

35.4%

$1,620

27.2%

$1,718

35.0%

$2,098

42.7%

Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.

$1,751

8.7%

$1,444

12.6%

$1,679

6.1%

$1,950

5.5%

Phoenix-Mesa-Scottsdale, Ariz.

$1,885

25.0%

$1,451

26.2%

$1,648

25.8%

$2,200

21.4%

Pittsburgh, Pa.

$1,500

8.8%

$1,210

7.5%

$1,490

15.7%

$1,630

9.5%

Portland-Vancouver-Hillsboro, Ore.-Wash.

$1,725

12.0%

$1,397

10.9%

$1,666

11.1%

$2,004

12.8%

Raleigh, N.C.

$1,561

20.7%

$1,472

26.6%

$1,440

22.4%

$1,750

21.7%

Richmond, Va.

$1,414

16.5%

$1,105

12.8%

$1,288

17.0%

$1,534

16.0%

Riverside-San Bernardino-Ontario, Calif.

$2,678

14.2%

$1,450

-3.6%

$2,170

19.7%

$2,970

12.0%

Rochester, N.Y.

$1,308

9.0%

$957

6.4%

$1,205

9.5%

$1,398

5.3%

Sacramento–Roseville–Arden-Arcade, Calif.

$2,029

13.1%

$1,920

17.9%

$1,880

11.1%

$2,200

13.1%

San Antonio-New Braunfels, Texas

$1,379

23.4%

$1,279

25.3%

$1,252

23.4%

$1,568

22.8%

San Diego-Carlsbad, Calif.

$3,008

25.4%

$2,388

22.2%

$2,727

23.8%

$3,369

24.9%

San Francisco-Oakland-Hayward, Calif.

$2,970

12.1%

$2,355

17.9%

$2,750

13.3%

$3,450

11.1%

San Jose-Sunnyvale-Santa Clara, Calif.

$3,024

14.2%

$2,416

23.3%

$2,810

14.6%

$3,441

14.8%

Seattle-Tacoma-Bellevue, Wash.

$2,104

17.1%

$1,758

25.0%

$2,079

16.8%

$2,516

12.6%

St. Louis, Mo.-Ill.

$1,299

9.1%

$999

3.5%

$1,225

9.8%

$1,428

9.8%

Tampa-St. Petersburg-Clearwater, Fla.

$2,098

32.3%

$1,875

26.1%

$1,867

33.1%

$2,349

33.8%

Virginia Beach-Norfolk-Newport News, Va.-N.C.

$1,505

13.8%

$1,300

11.6%

$1,428

10.8%

$1,602

13.3%

Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.

$2,078

12.3%

$1,705

13.6%

$1,985

11.0%

$2,431

10.5%

MethodologyRental data as of February for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. We use communities that reliably report data each month within the top 50 largest metropolitan areas. National rents were calculated by averaging the medians of the 50 largest metropolitan areas. *Boston, Mass. and Providence, R.I.’s February 2022 rental data is currently under review.

The affordable monthly rent is calculated by applying the 30% rule to the monthly median household income in each metro. The monthly median household income is derived from the annual median household income data sourced from Moody’s Analytics.

Please note: With the release of its February 2022 Rental Report, Realtor.com® incorporated a new and improved methodology for capturing and reporting rental listing trends and metrics. As a result of these changes, this release is not directly comparable with previous Realtor.com® data releases and reports. However, future Realtor.com® data releases, including historical data, will consistently apply the new methodology. See more details here.

About Realtor.com®Realtor.com® makes buying, selling, renting and living in homes easier and more rewarding for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago, and today through its website and mobile apps offers a marketplace where people can learn about their options, trust in the transparency of information provided to them, and get services and resources that are personalized to their needs. Using proprietary data science and machine learning technology, Realtor.com® pairs buyers and sellers with local agents in their market, helping take the guesswork out of buying and selling a home. For professionals, Realtor.com® is a trusted provider of 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®.

Media Contact press@realtor.com 

SOURCE Realtor.com

Link to Source

Leave a Comment

SOTD Membership

Register by Email

or
Already a member? Sign In