The COVID-19 pandemic may be over, but its effects are still being felt across the U.S. housing market.
Since the onset of the pandemic in April 2020, monthly rent prices for a typical apartment in the U.S. have increased by 28.7% to $1,858, according to a recent report from Zillow. Monthly rental costs for a typical single-family home have increased even more, rising 42.9% to $2,256.
Wages haven’t kept pace with rent growth, however, with median household income in the U.S. growing 22.5% to around $82,000 since April 2020, according to Zillow.
“Housing costs have surged since pre-pandemic, with rents growing quite a bit faster than wages,” said Orphe Divounguy, senior economist at Zillow, in a press release. “This often leaves little room for other expenses, making it particularly difficult for those hoping to save for a downpayment on a future home. High upfront costs are often overlooked, which can keep renters in their current homes.”
Including both single-family and multifamily rentals, Zillow found that the typical asking rent was $2,024 in April, which is up 0.5% month over month and 3.4% from April 2024.
The real estate listings company also looked at rental affordability in the top 50 U.S. metropolitan areas, which it defines as a household spending no more than 30% of its monthly income on rent. In eight of those metros, renters need to make at least $100,000 to afford rent. Cities to top the six-figure income mark include New York City, Boston, Miami and five cities in California: San Jose, San Francisco, San Diego, Los Angeles and Riverside.
New York City has the highest percentage of income required for a median household to afford a typical rental property at 54.6%. It is followed by Miami at 40.4%; Los Angeles at 36.4%, Tampa, Fla., at 33.5%; San Diego at 33.2%; Riverside at 32.8%; and Boston at 32.5%.
“Beyond high monthly rent prices, large upfront costs can pose a barrier for renters looking to move,” the Zillow report noted. “This is especially true in cities like New York and Boston, where broker fees — on top of security deposit and advance rent payments of one to two months — exacerbate rental affordability challenges.”
On the other end of the affordability scale, metro areas with the lowest percentage of income required for a median household to afford a typical rental property include Austin, Texas (19.8%); Minneapolis (20.2%); Raleigh, N.C. (20.6%); St. Louis (20.8%); and Salt Lake City (20.8%).
