A new data analysis by Redfin (NASDAQ:RDFN) has determined only 39% of renters are earning enough to afford the median-priced apartment.
During May, the $1,653 median apartment asking rent in May was $47 below its record high. According to the new data analysis, the typical U.S. renter household earns an estimated $54,712 per year, which is 17.3% less ($11,408 in dollar terms) than the $66,120 needed to afford monthly rent for the median-priced apartment.
The amount renters must earn to afford the median-priced apartment was up 0.8% year-over-year and up 22.9% from pre-pandemic May 2019 – this is also the highest level recorded since October 2022.
“Rents are growing at a snail’s pace compared to the rapid increases we saw during the pandemic and are unlikely to soar again anytime soon. As a result, wage growth should continue to outpace rent growth in the coming months, as it has been doing since 2022,” said Redfin Senior Economist Sheharyar Bokhari. “That will help narrow the affordability gap for renters, but for a lot of folks, the math still won’t check out. Many U.S. renters are and will remain burdened by the cost of having a roof over their head, and unlike homeowners, they’re not building wealth through rising property values.”
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