The typical U.S. renter household earns an estimated $54,712 per year. That’s 17.3% less—or $11,408 in dollar terms—than the $66,120 a renter must earn to afford monthly rent for the median-priced U.S. apartment ($1,653). Just 39% of renters make enough money to afford the median-priced apartment.
This is based on a Redfin analysis of median U.S. apartment asking rents as of the three months ending May 31, 2024 (referred to as “May” throughout this report), and estimated median incomes for renter households (referred to as “renters” throughout this report). We estimated 2023-2024 median household incomes using U.S. Census Bureau data from 2022—the most recent full year available—and Atlanta Federal Reserve data on year-to-date wage growth covering workers in the bottom half of the wage distribution. We consider an apartment affordable if a renter spends no more than 30% of their income on rent (which is the same as saying their annual income is at least 40 times their monthly rent).
The amount renters must earn to afford the median-priced apartment is at the highest level since October 2022. It’s up 0.8% year over year and up 22.9% from before the pandemic (May 2019), as that’s how much asking rents have risen. At $1,653, the median U.S. apartment asking rent in May was just $47 shy of its record high. Still, it’s worth noting that rent growth is essentially flat.
“Rents are growing at a snail’s pace compared to the rapid increases we saw during the pandemic, and are unlikely to soar again anytime soon. As a result, wage growth should continue to outpace rent growth in the coming months, as it has been doing since 2022,” said Redfin Senior Economist Sheharyar Bokhari. “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.”
The income a renter needs to afford the typical apartment did drop last year, but is now rising again as rents rebound. It fell to as low as $63,920 in December 2023, when rents briefly dipped below $1,600, but that was still unaffordable for many renters.
Multifamily construction surged during the pandemic, which is what caused rents to fall, but rents are now being buoyed by resilient demand; many young renters are opting to stay put rather than confront an increasingly unaffordable homebuying market. Still, there’s still a backlog of new units that are hitting the market every month, which is putting a lid on how much prices can grow.
In New York, the typical renter earns an estimated $67,358 per year. That’s 43.5% less than the $119,120 a renter needs to afford the median-priced apartment—the biggest gap among the 33 major metros Redfin analyzed. Next comes Miami (42.2% less), followed by Boston (38.7% less), Los Angeles (36.1% less) and Riverside, CA (30.8% less).
New York is perennially one of the most expensive rental markets, but affordability challenges have been intensifying; rents rose 9.2% from a year earlier in May—one of the biggest increases in the nation.
In Miami, rents fell 4.2% year over year, but affordability remains strained because costs soared so much during the pandemic moving frenzy.
In Austin, TX, the typical renter earns an estimated $72,808 per year. That’s 16.8% more than the $62,360 a renter needs to afford the median-priced apartment (a big jump from 2023, when the typical renter earned just 2.7% more). There are four other major metros Redfin analyzed where renters earn enough to afford the typical apartment: Houston (10.2% more), Phoenix (9.2% more), Washington, D.C. (3.2% more) and Dallas (0.9% more).
Austin has seen one of the steepest dropoffs in rents in the U.S., helping to make apartments more affordable. The median apartment asking rent in the Texas capital fell 7.2% year over year in May—the third biggest decline among the metros Redfin analyzed. Rents also fell in Phoenix and Dallas, down 5.5% and 1.3%, respectively.
Rents are falling in the Sun Belt in part because the region has been building more apartments than other parts of the country (like the Midwest and Northeast) to meet demand brought on by the influx of people who moved in during the pandemic. But the pandemic housing boom is now in the rearview mirror, and property owners are facing vacancies, which is causing rents to cool.
Washington, D.C., which has a lot of high-income transient workers, is the most notable outlier in the table above. While the typical renter earns slightly more than they need to afford the median-priced apartment, the gap is shrinking as rents rise; the typical D.C. renter earns $2,656 more than they need to afford the median-priced apartment, compared with $6,487 more in 2023. Asking rents in Washington, D.C. rose 11.1% from a year earlier in May—the biggest jump among the metros Redfin analyzed.
Metro-level data in this report covers 33 of the 50 most populous U.S. core-based statistical areas (CBSAs)—those for which Rent. and Redfin have sufficient rental data. The national figures are based on data for the entire U.S. Median asking rents cover newly listed units in apartment buildings with five or more units.
