In the U.S., discussions about housing frequently center on the homebuying market, whether “competition is tight” or “the market is overheated.” But of the 28% of Americans who rent, the rental market may be equally unstable and difficult to navigate, according to new ConsumerAffairs data, which examined the important variables that gauge affordability, quality of life, tenant protection regulations, and rental availability at the state level in order to determine which states are best for renters.
Some noteworthy, and occasionally unexpected, geographical trends are revealed by the rankings.
States Offering U.S. Renters the Best Options
The study showed the top five best states for aspiring renters are clustered in the Upper Midwest and Mountain West.
- North Dakota
- Minnesota
- Colorado
- Wyoming
- Utah
No. 1: North Dakota —The “Peace Garden State“
Per the study, and maybe not surprisingly to some, North Dakota was named the best state for renters for the third consecutive year.
- Median rent: $954 (fourth lowest)
- Typical share of income spent on rent: 23.7% (lowest)
- Rental vacancy rate: 8.3% (highest)
The cost of North Dakota’s rental market is a major factor in the state’s top ranking. The average rent there is nearly one-third less than the national median. Renters in North Dakota spend less than a quarter (23.7%) of their income on rent, making them the least burdened in America—whereas the average American spends 32%. Additionally, North Dakota has the highest rental vacancy rate in the United States, which benefits renters as well. With over two out of every five renter-occupied buildings constructed after 2000—the highest percentage in the country—many apartments are relatively new.
No. 2: Colorado — The “Centennial State”
Colorado was ranked in the top 10 states for renters last year due to issues with affordability. However, Colorado surged up 42 spots to the second-best spot in ConsumerAffairs’ most recent study. However, the median rent in the Centennial State continues to be among the highest in the nation. So, why the large increase, then?
- Median rent: $1,761
- Typical share of income spent on rent: 33.3%
- Rental vacancy rate: 5.1%
Colorado rose to the top thanks to exceptional tenant protections. Only two of the top 10 states, and only five states overall, have state laws that restrict the timing, frequency, or amount of rent increases. While some jurisdictions forbid local rent control and others permit or enforce rent caps, the majority of states do not set statewide rent rise limits.
No. 3: Minnesota — The “North Star State”
Although Minnesota is well-known for its friendly citizens, the state has many more “nice” things to offer. Go to the North Star State, which is ranked third for renter-friendliness, if you’re searching for a more renter-friendly setting.
- Median rent: $1,280
- Typical share of income spent on rent: 30.1%
- Rental vacancy rate: 5.3%
Tenant protections, cost, and quality of life are all vibrantly balanced for renters in Minnesota. The state’s average rent is roughly 9% less than the national median, and its annual rent growth is slower than the national average (3.6%). An estimated 86.2% of Minnesotans live within ten minutes’ walk of a park or green area, making the state notable for its park accessibility.
Minnesota regularly performs well, in contrast to Colorado’s fluctuating rankings from year-over-year. Over the course of the last three years of our analysis, the state has risen from eighth to fourth to its current peak of third place in the top 10 states for renters.
No. 4: Wyoming — The “Equality State”
Wyoming was ranked the fourth-best rental state in the U.S. Per the study, Wyoming provides its citizens with the best balance of affordability and quality of life out of all the states we analyzed. In both of these categories, it is the only state to place in the top 10.
- Median rent: $992 (eighth lowest)
- Typical share of income spent on rent: 25.8% (third lowest)
- Rental vacancy rate: 6.0%
The state is ranked seventh in terms of quality of life, in the top 10 for safety, and in the top five for access to green spaces. However, Wyoming ranks third nationwide for affordability, which is its strongest suit. With only a 2.5% year-over-year increase, the median rent is cheap (less than $1,000) and rising slowly (fifth lowest). Wyoming is the only state in this year’s top 10 that has dropped in rank from the previous year. But it was only by one spot (from third to fourth).
No. 5: Utah — The “Beehive State”
Utah completes the top five states for renters. Similar to Colorado, which is rated second, Utah rises to the top following a notable improvement from the previous year’s rankings (24 spots). Utah is in the top 10 states in terms of rental availability, much like top-ranked North Dakota. Renters have a plenty of new buildings to select from, as nearly four out of ten occupied rental apartments in the state were constructed after 2000.
- Median rent: $1,496
- Typical share of income spent on rent: 29.5%
- Rental vacancy rate: 5.5%
Renters in their 20s or 30s who want to eventually become homeowners should be aware that Utah has a young adult-friendly property market. For example, the Provo metro area boasts the highest share of young homeowners in the U.S., with nearly a quarter of homeowners under age 35.
Examining the Worst-Ranked States for Aspiring Renters
Contrarily, the top five states ranked the worst for renters are located in pricey regions across the U.S. The top five worst states include:
- Florida
- Arizona
- New Mexico
- Hawaii
- Massachusetts
Although Florida is currently the worst state for renters, the Sunshine State came in third place in the previous year’s research. The main motivating aspect is a crisis in rental affordability. Florida’s renters are the most burdened in the country due to the high rent, which is almost 18% higher than the national median and accounts for 37.4% of the average income. Additionally, rent is increasing more quickly than in the majority of states.
Arizona is ranked seventh in terms of affordability and second overall for renters. The affordability rating is more indicative of an impending storm than a current rent issue. Arizona’s median rent is just roughly 9% higher than the national average. Additionally, the state’s rent-to-income ratio is essentially at the national median. That might change, though, if rent keeps rising as it has. Arizona just recorded the most rent rise in the country, at 7.8% annually.
The median rent in New Mexico is almost 25% lower than the national median rent, despite the fact that renters there pay more than the suggested maximum of 30% of their income on rent. However, the “Land of Enchantment” has the lowest quality of living. The state has poor park and green space access, high crime rates, and subpar walkability.
Due in large part to its high cost, Hawaii is ranked fourth worst for renters. The typical monthly rent is $1,971, which is about 40% higher than the $1,413 national norm. However, rent has increased by the least amount in the nation—just 1.7% annually. Even though Hawaii has the highest median household income in the nation, the average renter’s salary is insufficient to keep up. Hawaii renters spend almost a third of their monthly income on rent, making them among of the most cost-burdened in the country.
Similar to Florida, it’s possible that an excessive percentage of available rental units are a result of these high expenses. Hawaii has one of the highest rental vacancy rates in the country, over two points above the national average.
Lastly, renters pay more for the privilege even though Massachusetts is among the top five states in terms of quality of life. The state is ranked third in terms of affordability but fifth overall. Renters are the third most cost-burdened in the United States, paying almost 35% of their monthly income on housing, and the median rent is 25% higher than the national median. Residents of Massachusetts do not benefit from an ample rental market, in contrast to some of the other worst-ranked states. With only 3.5% of available units, rental availability is still limited.
To read the full report, click here.
