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Thursday, December 08, 2022

Americans spend 26% of their income on rent

Renters are feeling higher cost pressure, based on August data, as Americans spend a quarter (26.4%) of their monthly budget on rent in the eighth month of the year, on average, according to the Realtor’s Monthly Rental Report. com.

Among America’s 50 largest metropolitan areas, coastal areas top the August list of least affordable rental markets, with rents accounting for the largest share of household income. in Miami (46.5%), Los Angeles (40.7%) and San Diego (37.1%).

By 2022, Florida will be the fastest growing state in the US real estate market.

“Our analysis underscores the real rental affordability challenges many Americans face today. Rent is much higher than in previous years And they’re sucking up a huge chunk of revenue, which is growing at a slower rate than inflation,” said Danielle Hale, chief economist at Realtor.com.

Still, there have been some bright spots for renters lately. Based on the general rule of keeping housing costs below 30% of your income, renters were able to do so in most large metropolitan areas during August.

Furthermore, as income continued to rise, national income fell below a new record for the first time in nine months. “If these trends and the typical seasonal cooling continue, Tenants will be able to better maintain the cost of housing in a relatively manageable part of their budget in the coming months,” he said.

Average rental price in the US drops for the first time since November 2021, in August $1,771, up from $1,781 in July, Further, rental growth continued to moderate year-on-year, at a double-digit pace (+9.8%) after 13 consecutive months.

Renting in the US suburbs is no longer as cheap as it used to be

Although National fares exceed 20% Overall (+22.8%) and across all unit sizes as of August 2020: studios on average $1,489 (+21.2%), one-bedroom apartments on average $1,653 (+22.6%) and two beds for a median thousand 964 dollars (+23.2%).

August 2022 Rental Metrics, National:

  unit size    average rent    Changes in August 2021    Changes in August 2020  
  General    $1,771    9.8%    22.8%  
  study    $1,489    11.8%    21.2%  
  A bed    $1,653    9.3%    22.6%  
  two beds    $1,964    9.1%    23.2%  

Rental affordability deteriorates, especially in m2 . In

Despite the decline in annual rental growth, the August figures show that rental affordability issues are on the rise. across the United States, A substantial portion of tenant income is attributable to rent in August compared to last year (on average 26.4% versus 25.7%).

Of the country’s 50 largest metro areas, nine had a rental share of over 30% of income, with coastal markets dominating the list of 10 least affordable metro areas in August.

Top 10 Least Affordable Markets by Percentage of Rent-to-Income,

  range    Metro    Earlier   2022   rent   share    August 2022   median   rent    2022   Monthly   SS   enter    August 2021   rent   share    August 2021   median   rent    2021   Monthly   SS   enter  
  1    Miami, Florida    46.5%    $2,626    $5,641    43.1%    $2,250    $5,216  
  2    Los Angeles, California    40.7%    $2,946    $7,234    40.2%    $2,675    $6,648  
  3    San Diego, California    37.1%    $2,888    $7,792    36.0%    $2,590    $7,186  
  4    New York, NY    36.3%    $2,807    $7,726    32.8%    $2,362    $7,206  
  5    Boston, Massachusetts    35.1%    $3,040    $8,654    30.7%    $2,475    $8,065  
  6    Tampa, Florida    32.9%    $1,789    $5,433    33.9%    $1,710    $5,050  
  7    Riverside, California    32.4%    $2,107    $6,508    35.4%    $2,105    $5,947  
  8    Orlando Florida    32.0%    $1,842    $5,766    30.1%    $1,620    $5,377  
  9    Providencia, Rhode Island    31.9%    $2,035    $6,386    29.9%    $1,758    $5,885  
  10    Chicago    29.7%    $2,061    $6,945     

Since higher rents leave less money in renters’ pockets each month, more than half (60%) of renters cited high rents and household expenses as the biggest causes of financial stress.

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