At the same time that U.S. income growth is flattening and foreign investors continue their pursuit of trophy city assets, housing market rents are pushing up. Such pricing pressures are squeezing U.S. renters, even as the cohort grows in number.
Looking across the board at rental pricing, “gateway” and big-name cities appear increasingly unattainable for those earning the median household income in their areas.
CRE Scoops contacted RENTCafe to better understand which U.S. markets are manifesting pressure on renters to earn within a higher income bracket. Here are the top 10 least affordable cities for renters in 2017. Data is sourced from Yardi Matrix and the U.S. Census Bureau.
Residents of Detroit spend 40% of their incomes on rent, according to RENTCafe. Average rent expense per year amounts to $10,440 and the median household income earners make $26,000 per year.
No surprise regarding this tech capital. San Francisco’s rent-to-income ratio stands at 41%. Median household income is at $92,100 but renters spend an average $37,000 in rent annually.
Newark, New Jersey
With a 42% rent-to-income ratio, Newark ranks #8 on the top ten least-affordable list. Median household income is $30,400. Renters pay an average $12840 per year in rent.
In Oakland, a renter earning the median household income of $58,800 pays an average $26,640 in rent annually. That amounts to a 45% rent-to-income ratio.
Median household income in Los Angeles is $52000 but the average spent on rent annually is $24,660. That’s a 47% rent-to-income ratio.
Situated within Miami-Dade county is Hialeah, a city more than 225,000. The median household income there is $29,100 but rent expense annually averages $15,111. Renters earnings the median household income in Hialeah dedicate about 54% of income to paying rent.
Jersey City, New Jersey
The median household income is $59,500. An average $32,100 is spent annually on rent. The rent-to-income ratio is 54%
Boston renters pay an average $33,240 annually. But the median household income is $58,300. The rent-to-income ratio for Boston stands at a whopping 57%, ranking it the third least-affordable city for renters.
Manhattan’s median household income earners make $75,000 per year. But the average amount of rent paid per year totals $44,700. The city that never sleeps ranks second this year, with a still-staggering rent-to-income ratio of 59%.
Miami tops out as this year’s least-affordable city, with renters earning the median household income burdened by a 63% rent-to-income ratio. The city’s median household income is $30,000. But renters spend an average of $1870 on rent annually.