Despite seasonally driven demand, rents across the U.S. dipped by $5 (or -0.3%) year-over-year and nationwide to a median rent of $1,753, according to the Realtor.com August Rental Report released today. Although affordability improved as a top-level trend, affordability varies widely by metro area and did not improve everywhere.
This month’s report looked at the rent burden across the U.S. and found the most affordable rental markets include Oklahoma City, Okla., Columbus, Ohio and Austin, Texas while the markets with the biggest rental burden include Miami, Los Angeles and New York.
“One way to think about housing affordability is to use the 30% rule of thumb, where housing expenses including rent or mortgage, utilities and HOAs or other fees should not exceed more than 30% of your income,” said Danielle Hale, chief economist at Realtor.com®. “Amid easing rents and growing incomes, rental affordability improved in a majority of U.S. major metros compared to last year, and crucially, typical asking rent is less than 30% of the typical household income nationwide. Although this is great news for many renters, housing affordability is still a challenge as rents are still considerably higher than before the pandemic and still above the 30% threshold in six of the metros Realtor.com examined.”
In August 2024, nationwide rent was more affordable than in the previous year. Renters earning the typical household income devoted 25.1% of their income to lease a typical for-rent home (vs. 25.9% in August 2023). As renting continues to be more affordable than buying in all major U.S metros, buying a typical starter home with 0-2 bedrooms in August 2024 required a devoted 38.5%* of a typical household income.
Compared to last August, the nation’s rental affordability has improved over the past year as rent prices have dipped and typical incomes have grown. As long as the trends of year-over-year rental declines and income growth persist, we can anticipate ongoing improvement in rental affordability over the course of the year.
Rental Markets with the Lowest Rental Burden
Oklahoma City is the most affordable rental market in August 2024. Other top affordable rental markets are found in America’s heartland and include Columbus, Ohio, Austin, Texas, Minneapolis, and Kansas City, KS.
1. Oklahoma City:
- Median Rent – $1,040
- Share of Income – 18.2%
2. Columbus, Ohio:
- Median Rent – $1,231
- Share of Income – 18.9%
3. Austin-Round Rock- Georgetown, Texas:
- Median Rent – $1,535
- Share of Income – 19.5%
4. Minneapolis, St. Paul – Bloomington, MI-WI:
- Median Rent – $1,557
- Share of Income – 19.8%
5. Kansas City, MO and KS:
- Median Rent – $1,357
- Share of Income – 20.2%
Rental Markets with a Rental Burden Above 30% of Income
Six of the top 50 metros had a rent share higher than 30% relative to the median household income. Miami was the least affordable rental market in August 2024. Among these six markets, New York is the only area where the current rent share of income is higher than at this time last year, suggesting modest improvement in most of the areas where affordability is most lacking.
1. Miami-Fort Lauderdale-Pompano Beach, FL:
- Median Rent – $2,388
- Share of Income – 40.8%
2. Los Angeles-Long Beach-Anaheim, CA:
- Median Rent – $2,885
- Share of Income – 38.7%
3. New York-Newark-Jersey City, NY-NJ-PA:
- Median Rent – $2,935
- Share of Income – 38.1%
4. San Diego-Chula Vista-Carlsbad, CA:
- Median Rent – $2,847
- Share of Income – 35.0%
5. Boston-Cambridge-Newton, MA-NH:
- Median Rent – $3,022
- Share of Income – 33.6%
6. Riverside-San Bernardino-Ontario, CA:
- Median Rent – $2,176
- Share of Income – 31.2%
Rental Markets with Most Improved Affordability
Among the top 50 metros, 39 of them saw affordability improvement in August 2024 compared to a year ago. Metros that experienced the most pronounced improvements in affordability were notably clustered in the South, where rents have shown a consistent downward trend over the preceding months. The main factor behind improved affordability in the South is the increase in new rental supply which drives down rents.
The most significant improvement was seen in Miami and Tampa, Fla., and San Diego, Calif. Despite this improvement, the proportion of monthly household income dedicated to rent in two of these three markets still exceeded the 30% threshold, indicating rental affordability remains an ongoing concern.
1. Miami-Fort Lauderdale-Pompano Beach, FL:
- Median Rent – $2,388
- Share of Income – 40.8%
- Change from August 2024 to August 2023 – (-3.3 ppt)
2. Tampa-St. Petersburg-Clearwater, FL:
- Median Rent -$1,733
- Share of Income – 29.9%
- Change from August 2024 to August 2023 – (-2.8 ppt)
3. San Diego-Chula Vista-Carlsbad, CA:
- Median Rent – $2,847
- Share of Income – 35.0%
- Change from August 2024 to August 2023 – (-2.4 ppt)
4. Nashville-Davidson-Murfreesboro-Franklin, TN:
- Median Rent – $1,595
- Share of Income – 23.7%
- Change from August 2024 to August 2023 – (-2.1 ppt)
5. Charlotte-Concord-Gastonia, NC-SC:
- Median Rent – $1,538
- Share of Income – 23.8%
- Change from August 2024 to August 2023 – (-1.9 ppt)
6. Phoenix-Mesa-Chandler, AZ:
- Median Rent – $1,565
- Share of Income – 24.7%
- Change from August 2024 to August 2023 – (-1.9 ppt)
Rental Markets with Most Deteriorated Affordability
Affordability eroded most in more affordable Midwest markets such as St Louis, Mo., Cincinnati, Ohio and Minneapolis, Minn., which saw faster rent growth. In fact, median asking rents in these markets continue to rise in recent months, suggesting an ongoing surge in demand within these budget-friendly areas.
1. St. Louis, MO-IL:
- Median Rent – $1,363
- Share of Income – 21.7%
- Change from August 2024 to August 2023 – 0.7 ppt
2. Washington-Arlington-Alexandria, DC-VA-MD-W.VA:
- Median Rent – $2,319
- Share of Income – 23.5%
- Change from August 2024 to August 2023 – 0.6 ppt
3. Cincinnati, Ohio-KY-IN:
- Median Rent – $1,380
- Share of Income -21.6%
- Change from August 2024 to August 2023 – 0.4 ppt
4. New York-Newark-Jersey City, NY-NJ-PA:
- Median Rent – $2,935
- Share of Income – 38.1%
- Change from August 2024 to August 2023 – 0.4 ppt
5. Minneapolis-St. Paul-Bloomington, MN-WI:
- Median Rent – $1,557
- Share of Income – 19.8%
- Change from August 2024 to August 2023 – 0.3 ppt.
To read the full report, including more data, charts, and methodology, click here.
