Realtor.com® August Rental Report: Rental Affordability Has Generally Improved In Most Major U.S. Markets

Most Affordable Markets Include Oklahoma City, Okla., Columbus, Ohio and Austin, Texas and Least Affordable Markets Include Miami, Los Angeles and New York 

SANTA CLARA, Calif., Sept. 19, 2024 /PRNewswire/ — 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.

Affordability of Rentals
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, Okla., 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, Minn., and Kansas City, Kan.

Oklahoma City, Okla. – Median Rent – $1,040, Share of Income – 18.2%
Columbus, Ohio – Median Rent – $1,231, Share of Income – 18.9%
Austin-Round Rock– Georgetown, Texas – Median Rent – $1,535, Share of Income – 19.5%
Minneapolis, St. Paul – Bloomington, Minn. Wis. -Median Rent –  $1,557, Share of Income – 19.8%
Kansas City, Mo. and Kan. – 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.

Miami–Fort Lauderdale–Pompano Beach, Fla. – Median Rent – $2,388, Share of Income – 40.8%
Los Angeles-Long Beach–Anaheim, Calif. – Median Rent – $2,885, Share of Income – 38.7%
New York–Newark–Jersey City, N.Y.-N.J.-Pa. – Median Rent – $2,935, Share of Income – 38.1%
San Diego–Chula Vista–Carlsbad, Calif. – Median Rent – $2,847, Share of Income – 35.0%
Boston–Cambridge–Newton, Mass.-N.H. – Median Rent – $3,022, Share of Income – 33.6%
Riverside–San Bernardino–Ontario, Calif. – 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. 

Miami–Fort Lauderdale–Pompano Beach, Fla. – Median Rent – $2,388, Share of Income – 40.8%, Change from August 2024 to August 2023 – -3.3 ppt
Tampa–St. Petersburg-Clearwater, Fla. – Median Rent –$1,733, Share of Income – 29.9%, Change from August 2024 to August 2023 – -2.8 ppt
San Diego–Chula Vista–Carlsbad, Calif. – Median Rent – $2,847, Share of Income –  35.0%, Change from August 2024 to August 2023 – -2.4 ppt
Nashville–Davidson–Murfreesboro–Franklin, Tenn. – Median Rent – $1,595, Share of Income – 23.7%, Change from August 2024 to August 2023 – -2.1 ppt
Charlotte–Concord–Gastonia, N.C.-S.C. – Median Rent – $1,538, Share of Income – 23.8%, Change from August 2024 to August 2023 – -1.9 ppt
Phoenix–Mesa–Chandler, Ariz. – 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.

St. Louis, Mo.-Ill. – Median Rent – $1,363, Share of Income – 21.7%, Change from August 2024 to August 2023 – 0.7 ppt
Washington–Arlington–Alexandria, D.C.-Va.-Md.-W.Va – Median Rent – $2,319, Share of Income – 23.5%, Change from August 2024 to August 2023 – 0.6 ppt
Cincinnati, Ohio-Ky.-Ind. –  Median Rent – $1,380, Share of Income -21.6%, Change from August 2024 to August 2023 – 0.4 ppt
New York–Newark–Jersey City, N.Y.-N.J.-Pa. – Median Rent – $2,935,  Share of Income – 38.1%, Change from August 2024 to August 2023 – 0.4 ppt
Minneapolis-St. Paul–Bloomington, Minn.-Wis. – Median Rent – $1,557,  Share of Income – 19.8%, Change from August 2024 to August 2023 – 0.3 ppt

National Trends

August 2024 marks the 13th month in a row of year-over-year rent decline for 0-2 bedroom properties observed since trend data began in 2020. Asking rents dipped by $5 or -0.3% year-over-year.
The median asking rent in the 50 largest metros registered at $1,753, down by $2 from last month and $7 lower than its August 2022 peak.
Median rent declined in all size categories with larger declines in smaller-sized units: Studio: $1,455, down $20 (-1.4%) year-over-year; 1-bed: $1,632, down $11 (-0.7%) year-over-year; 2-bed: $1,941, down $5 (-0.3%) year-over-year.

Rental Data – 50 Largest Metropolitan Areas – August 2024

Methodology Note
* The monthly cost of buying a home was calculated by averaging the median list prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market. Monthly buying costs assume an 8% down payment for starter home buyers who are typically first-time buyers, with a mortgage rate of 6.5%, and include taxes, insurance, and HOA fees.

Rental data as of August 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.

Rental affordability analysis: The affordable monthly rent is calculated by applying the 30% rule to the estimated 2024 monthly median household income nationwide ($6,985 across the 50 largest U.S. metros, on average) and in each metro. The monthly median household income is derived from the annual median household income data sourced from Claritas.

With the release of its August 2024 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since August 2024 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.

About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.

Media Contact: Mallory Micetich, [email protected]

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SOURCE Realtor.com

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