August data shows renters spent more than one-quarter (26.4 percent) of their monthly budgets on rents in August, according to the Realtor.com Monthly Rental Report. Among the 50 largest U.S. metros, coastal areas topped August’s list of least affordable rental markets, with rents accounting for the highest shares of household incomes in Miami, Los Angeles and San Diego.
Nationally, rents accounted for a higher share of renters’ incomes in August compared to last year.
In Miami, renters spent, on average, 46.5 percent of their monthly income on rent last month. Los Angeles was close behind at 40.7 percent, followed by San Diego at 37.1 percent.
Riverside wad the only other California city to land in this dubious top 10, with renters spending 32.4 percent of their income on rent.
“Our analysis underscores the very real rental affordability challenges that many Americans face today. Rents are significantly higher than in previous years and are taking up a substantial portion of incomes, which are growing at a slower pace than inflation,” said Realtor.com Chief Economist Danielle Hale. “Still, there are some bright spots for renters as of late. Based on the general rule of thumb that you should keep housing costs to under 30 percent of your paycheck, renters were able to follow best practice in the majority of large metros in August. Plus, as rent growth continued to cool, national rents didn’t hit a new record-high for the first time in nine months.1 If these trends and typical seasonal cooling persist, renters may be better able to keep housing costs to a relatively manageable portion of their budgets in the months ahead.”
Compared to the national rent-to-income share, rents were significantly more affordable in many markets in Middle America, including Oklahoma City, Minneapolis, St. Louis and Louisville.