Renters Getting More Bang for Their Buck

Renters, we may have some affordability relief ahead! In the U.S., an apartment that is more than 70 square feet larger now than it was when rents peaked in mid-2022 is within the affordability range of a tenant on a $2,000 monthly budget. This is in line with a recent Redfin report published in December.

In October, the median rent for an apartment in America was $1,615. The estimated apartment size for a $2,000 budget would be 1,103 square feet, which corresponds to a median price per square foot of $1.81.

In August 2022, when the average apartment was listed at an all-time high of $1.94 per square foot, the median asking rent reached its highest point at $1,700. This equated to a 1,029 square foot apartment for a $2,000 budget, which is 74 square feet less than it is today. It is comparable in size to a tiny home office.

In October 2019, five years prior to the pandemic housing bubble that drove rentals to skyrocket, the median asking rent in the U.S. was $1,337, or $1.47 per square foot. For a $2,000 budget, the estimated apartment size was 1,359 square feet, which is 256 square feet more than it is now. To put things in perspective, the typical bedroom nationwide is about 130 square feet.

“Renters are getting more for their money than they were during the pandemic because asking rents have since stabilized below their record high, and incomes have continued to climb,” said Sheharyar Bokhari, Senior Economist at Redfin. “Rental affordability has improved thanks to the recent apartment construction boom, especially in Sun Belt states. That trend is likely to continue into 2025, as there are a lot of still-to-be-finished apartment buildings due to come online.”

Renters Getting More Value in Larger Apartments

In general, the cost per square foot of smaller apartments is higher than that of bigger flats. In October, a one-square-foot apartment with 0–1 bedrooms cost $2.09, but an apartment with 3+ bedrooms only cost $1.51.

Smaller 0–1 bedroom apartments are more common in crowded metro areas like New York, where rents are higher, which contributes to their higher price per square foot.

Another important factor in deciding the size of an apartment that can be rented for a given price range is geography. In more than half of the major metro regions we examined in October, a renter on a $2,000 monthly budget may afford an apartment larger than 1,000 square feet.

In Memphis, TN, a renter with a $2,000 budget can acquire 1,000 more square feet than a tenant in San Jose, CA, with the same budget.

Memphis offers the best bargain for renters, with a 1,570-square-foot apartment costing just $2,000. The five metro areas where $2,000 is the most expensive for space rental are Birmingham, AL (1,523 square feet), Louisville, KY (1,479 square feet), St. Louis (1,388 square feet), and Houston (1,380 square feet).

Top 10 Metros Where $2,000 Rents The Most Space:

On the east and west coastlines, where rents are higher, the situation is somewhat different. A renter in San Jose, CA, with a $2,000 budget can only afford the smallest apartment in the most populated metro area, which is 537 square feet. That is a difference of almost 1,000 square feet when compared to Memphis, TN.

The five metro areas where $2,000 rents the least space are San Francisco (565 square feet), New York (581 square feet), Los Angeles (591 square feet), and San Diego (602 square feet).

Top 10 Metros Where $2,000 Rents The Least Space:

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