Average-Income Earners Face Challenges Securing Affordable Rentals

For many renters, the American dream of finding a comfortable place to call home is becoming even more challenging. In a new study, Mercury Insurance revealed that the U.S. Bureau of Labor Statistics reported that between January 2022 and January 2023, consumer prices for primary home rent increased by an estimated 8.6%.

The average hourly wage rose by 5.1% over that time. According to these figures, the cost of renting has risen faster than wages, which has made it more difficult for some people to afford housing.

For many Americans, this situation poses the crucial question, “How many rental options would you have if you earned the average salary in 60 of America’s largest cities?”

Key Findings:

  • Across 60 cities in the study, average-income individuals have access to 24% of rentals.
  • Average earners in Boston may face challenges in securing affordable rentals, as less than 1% of the city’s rental options are accessible to individuals earning $80,810. San Diego and Miami also ranked among the bottom three in terms of availability for average-income earners.
  • On the contrary, Detroit stands out with a substantial number of rentals for average-income earners, with over 72% of the market offering affordability for those making $62,000, the average salary.
  • Four cities in California ranked among the lowest 10 cities in terms of available rentals for individuals with average incomes.
  • Perhaps unsurprisingly, eight of the top 15 cities with the most available rentals for average-income earners were located in the Midwest.

Top Five U.S. Cities With the Most Rental Availability for Average Income Earners:

1. Detroit

  • Average annual salary: $62,000
  • Net monthly income: $4,431
  • Maximum amount to spend on rent: $1,329
  • Available rentals within rent cost range: 1251

The city with the greatest rental options for those with average incomes is Detroit. Residents may afford to pay up to $1,329 in rent per month with a net monthly income of $4,431 and an average annual salary of $62,000. With 1,251 possible rentals within this pricing range out of the over 1,700 rentals on the market, this budget offers a wide choice of options.

The city’s continuous redevelopment initiatives have produced a multitude of inexpensive housing options, while Detroit’s robust automotive and tech industries have helped to maintain a stable average salary. For renters, Detroit stands out due to its affordability and economic balance.

2. Milwaukee

  • Average annual salary: $59,320
  • Net monthly income: $4,277
  • Maximum amount to spend on rent: $1,283
  • Available rentals within rent cost range: 621

Milwaukee comes in second on the list of cities where average-income earners may find the most rental options. Milwaukee people may afford to pay up to $1,283 in rent per month with an average yearly salary of $59,320 and a net monthly income of $4,277. Out of the more than 1,000 rentals on the market in 2024, this budget gives options for 621 possible rentals in this price range.

Milwaukee’s balanced economy and diverse housing market make it an excellent destination for anyone looking for reasonably priced rentals. Milwaukee is a popular destination for renters looking for affordability and better quality of life due to its sustainable development and enhanced public transportation.

3. Indianapolis

  • Average annual salary: $57,740
  • Net monthly income: $4,812
  • Maximum amount to spend on rent: $1,444
  • Available rentals within rent cost range: 959

Indianapolis is another top choice for middle-class individuals looking for reasonably priced rental properties, since an average yearly salary of $57,740 equates to a net monthly income of $4,812. Renters at this salary level have the option of spending up to $1,444 on housing, which means that 959 of the almost 1,600 available rentals fall within this spending limit.

The city’s broad economy, which includes sectors like healthcare, education, and finance that have stable average earnings, may have a significant role in its affordability. Indianapolis’ Midwest location aligns with the trend of lower living expenses, just like Detroit and Milwaukee.

4. Memphis, TN

  • Average annual salary: $52,660
  • Net monthly income: $4,008
  • Maximum amount to spend on rent: $1,203
  • Available rentals within rent cost range: 971

Memphis is not only a notable location for some good American BBQ, but it also offers average-income earners a wide variety of reasonably priced rental options. At $52,660 per year on average and $4,008 in monthly net income, Memphis residents may afford to pay up to $1,203 in rent every month. Out of the around 2,000 rentals available on the market, this budget gives options for 971 rentals falling within this price range.

Memphis’s varied economy, which includes industries like healthcare, transportation, and music, may be the main factor contributing to its affordability. In contrast to many other American cities, these industries contribute to stable average earnings and a cheap cost of living.

5. Minneapolis

  • Average annual salary: $67,060
  • Net monthly income: $4,689
  • Maximum amount to spend on rent: $1,407
  • Available rentals within rent cost range: 713

Due in part to an average annual salary of $67,060, Minneapolis stands out as a city where average-income earners have significant access to cheap renting options. With a net monthly income of $4,689 from this salary, residents can pay up to $1,407 toward rent. This degree of financial flexibility contributes to the 713 rentals in this price range being available.

Minneapolis’s strong economy is the reason it is so affordable. In comparison to other major U.S. cities, the cost of living in these industries is reasonable, and average incomes are consistent.

Top Five U.S. Cities With the Least Rental Availability for Average Income Earners:

1. Boston

  • Average annual salary: $80,810
  • Net monthly income: $5,537
  • Maximum amount to spend on rent: $1,661
  • Available rentals within rent cost range: 10

Per the report, Boston has a slightly higher average yearly salary of $80,810, which makes it a difficult city for average earners looking for inexpensive housing options. With a net monthly income of $5,537 from this salary, renters may cover up to $1,661 in housing costs. Only 10 houses out of approximately 7,500 rentals on the market in 2024 meet the requirements, indicating the extreme scarcity of rentals available in this price range.

Boston ranks poorly for affordable rentals for a number of reasons. Due to the city’s rich historical heritage and standing as a significant center for education and technology, there is a strong demand for homes, which is driving up rental prices. The issue is made worse by Boston’s condensed geography, which significantly reduces the possibility of new, reasonably priced housing developments. In addition, the city’s many schools and universities drive up competition in the rental market, especially for cheaper apartments.

2. San Diego

  • Average annual salary: $71,080
  • Net monthly income: $4,960
  • Maximum amount to spend on rent: $1,488
  • Available rentals within rent cost range: 19

San Diego, a city renowned for its breathtaking beaches, pleasant weather, and energetic way of life, has a hard time offering reasonably priced rental properties to those with typical incomes. The average yearly salary for residents is $71,080, which translates to a net monthly income of about $4,960. However, the rental market is limited, with only 19 out of 3,600 available rentals.

The reasons for the dearth of reasonably priced rentals in San Diego can be linked to the city’s economy, which includes industries like international trade, healthcare, and defense. Although the average salary in the city is rather high due to these businesses, living expenses, particularly those associated with housing, are also increased.

3. Miami

  • Average annual salary: $58,980
  • Net monthly income: $4,436
  • Maximum amount to spend on rent: $1,331
  • Available rentals within rent cost range: 41

Miami’s renowned sun-kissed beaches, exciting nightlife, and diverse cultural offerings make it a popular travel destination, according to the report. It does, however, also rank as a city with few reasonably priced rental options accessible to those with typical incomes. In Miami, an average yearly salary of $58,980 results in a net monthly income of $4,436, which people can use to pay up to $1,331 in rent. However, it becomes quite difficult to find inexpensive property because there are only 41 available rentals in this price range.

There are a few reasons why Miami doesn’t have many reasonably priced rental options. The city’s attraction as a major international travel and entertainment destination has increased demand for homes, although availability remains limited by geography. In addition, Miami’s population growth—which is being driven by both internal and outside immigration—increases competition for reasonably priced rentals, making it harder for people with ordinary incomes to find acceptable accommodation.

4. Riverside, CA

  • Average annual salary: $58,160
  • Net monthly income: $4,212
  • Maximum amount to spend on rent: $1,264
  • Available rentals within rent cost range: 6

Tucked away in the countryside of Southern California, Riverside offers a special combination of suburban beauty and easy access to the business opportunities available in the Greater Los Angeles area. On the list of cities with the fewest rental options for those with medium incomes, it is ranked fourth. Rent for Riverside residents is limited to $1,264 per month, based on an average yearly salary of $58,160 and a net monthly income of $4,212. But there are just six rentals in the city that fall into this price bracket, which makes finding cheap accommodation quite difficult.

Because of its proximity to Los Angeles, which drives up demand and rental prices, Riverside lacks affordable housing. The report found that land use regulations, development expenses, and a preference for single-family homes—which may restrict the construction of new, reasonably priced rental units—are further factors straining Riverside’s housing market.

5. New York City

  • Average annual salary: $78,560
  • Net monthly income: $5,383
  • Maximum amount to spend on rent: $1,615
  • Available rentals within rent cost range: 280

The top five cities with the fewest rental options for people with ordinary incomes are rounded out by none other than the Big Apple—New York City. New Yorkers, who make an average of $78,560 annually, may afford to spend up to $1,615 on rent every month, with a net monthly income of $5,383. But it gets harder to find cheap accommodation in this price category because there are only 280 rentals available.

The city’s enormous demand—which greatly exceeds supply—for housing across all boroughs is probably the cause of this scarcity. The city has one of the most competitive real estate markets in the world, with upscale condos and developments frequently taking precedence over inexpensive homes. New development is restricted in this highly crowded metro due to the limited area available, particularly for cheap housing projects.

As seen above, examining the U.S. rental market shows that there are significant regional differences in the supply of reasonably priced rentals. There is a severe shortage of cheap housing in some locations, such as Boston and San Diego, while cities like Detroit and Milwaukee have plenty of options within the average-income earner’s budget.

To read the full report, including more data, charts, and methodology, click here.

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Demetria C. Lester

Demetria C. Lester

Demetria C. Lester is a reporter for MortgagePoint (formerly DS News and MReport) with more than eight years of writing and editing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is a jazz aficionado, Harry Potter fanatic, and likes to read. She can be reached at demetria.lester@thefivestar.com.
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