Against the backdrop of global competition resides U.S housing trends. With economies interconnected across oceans, both macroeconomic and microeconomic factors have come to play in countries’ home markets. In the case of U.S. housing, the cost of renting becomes the economic litmus test.
The U.S. Bureau of Labor Statistics (BLS) has found inflation on shelter to be the third-highest year-over-year, experiencing 3.3% growth for the 12 months ending May 2017. The only sectors outpacing shelter year-over-year are the price of fuel oil (11.9%) and the cost of utility (piped) gas service, at 12.8%.
At the same time, a new generation is trying to establish itself in society – the 75,000,000-strong Millennial cohort have entered the workforce. But they are cash-strapped, still making 20% less than their parents did at the same age, according to BLS. And more than one-third still live at home, reports Pew Research.
CRE Scoops contacted RENTCafe to get a better idea of U.S. markets where the livable wage is most-livable for renters. Here are the top 10 most affordable cities for renters in 2017. Data is sourced from Yardi Matrix and the U.S. Census Bureau.
The median household income for residents of El Paso is $45,100 per year, but annual rent expenses cost on average $8460. With a 19% rent-to-income ratio, this Southern city rounds out the top 10.
9. Lexington, Kentucky
The average annual rent here is $9,600 but the median household income is $52,000. The 18% rent-to-income ratio makes Lexington the ninth-most-affordable rental market in the U.S.
8. Tulsa, Oklahoma
The annual rental cost averages $7800 for Tulsa, and the median household income is $43,200. With a rent-to-income ratio of 18%, Tulsa ranks eighth in affordability for renters.
7. Fort Wayne, Indiana
Fort Wayne, Indiana ranks as #7 of the top 10 affordable cities for renters. The city’s median household income is $45,000 and an average $7,800 per year is spent on rent.
6. Bakersfield, Calif.
Bakersfield, California renters spend an average $10,620 per year. The median income in the city is $61,000. The city is ranked #6 in rental affordability, with a 17% rent-to-income ratio.
5. Chandler, Arizona
Chandler’s median household income is $75,600. The city supports a population of approximately 247,000. Rental costs average $12,840 annually, resulting in a 17% rent-to-income ratio and putting it in fifth place.
4. Plano, Texas
Despite the spate of office and multifamily development that Plano has seen since 2015, it still ranks well up in the top 10, at #4. Median household income is $83,800 and rental costs per year average $14,160. The city has a 17% rent-to-income ratio.
3. Oklahoma City, Oklahoma
Oklahoma City wins the bronze for rental affordability. Median household income is $50,700 but annual average rent costs are just $8400, giving the city a 17% rent-to-income ratio.
2. Wichita, Kansas
At 15% rent-to-income ratio, the city of Wichita ranks second place for U.S. rental affordability. Median household income is $46,900 and rent costs per year average $7400. Population in 2016 was estimated at approximately 389,000 residents.
1. Gilbert, Arizona
The 237,000 residents of Gilbert should be a happy bunch. This Arizona city enjoys a median income of $86,000 and annual rent averages $12,300. At just 14% rent-to-income spending, Gilbert stands as the most affordable U.S. city for renters.