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Median Income to Rent an Apartment Drops to Lowest Level Since 2022

Rental affordability has improved across the country as the earnings needed to afford an average US apartment fell to the lowest level since March 2022 while salaries trended up.

Renters need to earn a $63,680 salary to afford apartment rent which costs $1,592 per month, according to a Redfin report. That is down 0.4% from a year ago and down 6.4% from August 2022, when the median asking rent hit an all-time high of $1,700 and a renter would have had to earn $68,000 to afford a typical apartment.

Meanwhile, renters earned a median income in 2024 of $54,752, up 5.3% from 2023, when the average was $52,019. In 2019, the figure was $40,505, the Redfin report said.

While the 2024 figure leaves nearly a $9,000 gap between what renters need to earn versus what they are actually making to afford the median monthly rent for an apartment, the difference between the two is the smallest it has been in the five years Redfin has tracked the two metrics.

A recent boom in apartment construction is the driving force behind improving rental affordability, said Redfin senior economist Sheharyar Bokhari.

“The affordability gap between renting and buying is likely to widen further in 2025, as home prices rise and mortgage rates remain high,” noted Bokhari. “That means potential homebuyers — especially from younger generations — may decide to continue renting for longer, as it’s the only affordable option.”

Across 44 major metros Redfin analyzes, 15 were home to renters that earned more than was needed to afford the median rent in December. That is up from seven metros one year prior.

Austin was the most affordable market with a median renter salary of $69,781, which is $14,000 more than they need to afford a typical apartment. Rental affordability also improved the most in Austin than any other market.

“Austin — like many Sun Belt metros — saw some of the highest levels of multifamily housing construction over the past few years, and rents are now starting to fall as supply increases and demand levels off.”

The other most affordable markets include Houston, Dallas, Salt Lake City and Raleigh, and the markets where affordability improved the most year-over-year were Tampa, Jacksonville, Nashville and New York, according to Redfin.

Providence, Rhode Island, was the least affordable market, with the median salary of $50,408 falling 50% short of the $85,800 needed to rent in the market. Historically expensive metros continued to be out of reach for renters earning a median salary. Those markets include Miami, New York, Los Angeles and Boston.

Providence was also the market where affordability worsened the most year-over-year, followed by Virginia Beach, Virginia; Louisville, Kentucky; Baltimore; and Buffalo, New York.

Reprinted with permission from the Friday, 24 January 2025 07:03:33 EST online edition of GlobeSt © 2025 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.