Story at a glance
- Those living in the New York metro area have the highest rent-to-income ratio in the country, at nearly 69 percent.
- New York was followed by Miami and Fort Lauderdale, Fla., respectively.
- Los Angeles and Palm Beach, Fla., also had some of the highest ratios in the country.
Renters living in the New York metro area have the highest rent-to-income ratio in the country at nearly 69 percent, according to a new report from Moody’s Analytics.
Figures show that for the first time in more than 20 years, the entire United States is rent-burdened, as the average American rent-to-income ratio reached 30 percent. The ratio reflects what percentage of a household’s income is spent on rent.
That total is up 1.5 percent from last year’s estimation.
New York was followed by Miami; Fort Lauderdale, Fla.; Los Angeles; and Palm Beach, Fla., respectively.
America is changing faster than ever! Add Changing America to your Facebook or Twitter feed to stay on top of the news.
Northern New Jersey; Boston; Tampa-St.Petersburg, Fla.; San Francisco; and Orlando, Fla. rounded out the top 10 metros with the highest rent-to-income ratios.
The increases are largely due to rising mortgage rates, which pushed would-be buyers to stay renters and caused many households to be priced out of buying a home. This resulted in increased demand for apartments, driving up rates.
At the state level, only Massachusetts, Florida and New York had ratios above 30 percent.
Despite slower average rent-burden growth in the Northeast during the first two years of the COVID-19 pandemic — when Americans left these expensive regions for other parts of the country — reverse migration in 2022 brought back many of these renters, fueling the region’s current growth. By the end of last year, the Northeast was again considered the least affordable U.S. region to live in, authors wrote.
However, during the migration away from the Northeast, rental markets in the South Atlantic and Southwest saw the greatest decline in their affordability.
In these regions, “the median household incomes were also not keeping pace with the rent growth, creating the biggest disparity in growth rates among all regions. By the end of 2022, as pandemic migration ebbed and the rent growth fever broke, the South Atlantic and Southwest showed much expected signs of moderating,” report authors wrote.
Metros that experienced the fastest rent growth from 2020 to 2021 also saw the biggest declines in affordability during those two years, with rent-to-income ratios growing by 3.9 percent.
These areas included Miami; Charleston, S.C.; and Tucson, Ariz., among others. Average rents rose by more than 20 percent while median household income increased by just 6 percent in these regions. By the end of 2021, the rent-to-income ratio grew from 23 percent to nearly 27 percent.
changing america copyright.
