Renters need to earn $63,680 to afford the median asking rent ($1,592) for an apartment, according to a data report from Redfin (NASDAQ: RDFN). This marks the lowest amount needed for rental housing occupancy since March 2022, as well as a 0.4% year-over-year decline and a 6.4% drop from August 2022 when the median asking rent hit an all-time high of $1,700.
In terms of wage strength, there is good news and bad news. The good news: Redfin’s report noted that renters are now earning more – the estimated median income for a renter in 2024 was $54,752, up 5.3% from 2023 ($52,019) and 35.2% from before the pandemic in 2019 ($40,505). The bad news: the current figure is 14% less – or $8,928 a year in dollar terms – than the $63,680 income needed to afford the median monthly apartment. Still, the latest data is the smallest gap in the five years Redfin has tracked the two metrics.
Among the nation’s 44 major metros, the Texas capital of Austin was identified by Redfin as the most affordable metro for renters while Rhode Island’s capital of Providence was the least affordable.
“Rental affordability will continue improving this year, as wages grow and rents remain flat, thanks to the recent boom in apartment construction,” 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. That means potential homebuyers – especially from younger generations – may decide to continue renting for longer, as it’s the only affordable option.”
