Americans spend 26.4% of their monthly budgets on rent, an increase from the 25.7% from 2021, according to the August Monthly Rental Report from realtor.com®.
The report found that the U.S. median rental price declined for the first time since November 2021, $1,781 in July to $1,771 in August. Additionally, rent growth continued moderating on a year-over-year basis, down to a single-digit increase, plus 9.8%, after 13 straight months at a double-digit pace.
Key highlights:
- National rents remained more than 20% higher than in August 2020 overall and across all unit sizes, with studios at a median of $1,489 (+21.2%), one-beds at a median of $1,653 (22.6%), and two-beds at a median of $1,964 (+23.2%).
- Among the 50 largest U.S. metros, nine had a rent-to-income share that was higher than 30%.
- Rental affordability worsens nationwide and especially in coastal metros, with rents accounting for the highest shares of household incomes in Miami at 46.5%, Los Angeles at 40.7%, and San Diego at 37.1%.
- Eight out of the 10 most affordable markets were located in Middle-America, ranging from a high of 21.7% rent-to-income share in Indianapolis and a low of 17.5% in Oklahoma City.
- The largest overall median rent was $3,040 in the metro area of Boston-Cambridge-Newton, MA-NH, and the largest overall year-over-year increase was 24.9% in the metro area of Chicago-Naperville-Elgin, IL-ID-WI.
- The lowest overall median rent was $1,194 in the metro area of Birmingham-Hoover, AL, and the lowest overall year-over-year increase was 4.2% in the metro area of Atlanta-Sandy Springs-Roswell, GA.
Major takeaway:
“Our analysis underscores the very real rental affordability challenges that many Americans face today. Rents are significantly higher than in previous years and are taking up a substantial portion of incomes, which are growing at a slower pace than inflation,” said Realtor.com® Chief Economist Danielle Hale. “Still, there are some bright spots for renters as of late. Based on the general rule of thumb that you should keep housing costs to under 30% of your paycheck, renters were able to follow best practice in the majority of large metros in August. Plus, as rent growth continued to cool, national rents didn’t hit a new record-high for the first time in nine months. If these trends and typical seasonal cooling persist, renters may be better able to keep housing costs to a relatively manageable portion of their budgets in the months ahead.”
For the full report, visit www.realtor.com/research/august-2022-rent.
