Rents Are Down For 13 Straight Months; Affordability Is Up – These 6 Cities Offer The Best Breaks

Rental prices have been on a downward trend for over a year, offering welcome relief amid rising costs in other sectors of the economy.

According to data issued by Realtor.com last week, August marked the 13th consecutive month of year-over-year declines in median asking rents across the nation’s 50 largest metropolitan areas. Median rents for August came in at $1,753, which marks a $5 decrease from August of last year.

The trend is important given the economic context of inflation and increased living costs. 

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  Jiayi Xu, an economist at Realtor, said that the decline in rents coupled with income growth is improving overall rental affordability.

“For the median household, the nation’s rental affordability has improved over the past year as rent prices have dipped and typical incomes have grown,” Xu said. The average U.S. household now spends about 25.1% of their paycheck on rent, down from 25.9% in August last year.

However, the rental landscape is still uneven across the country. While some cities grapple with affordability issues, others are becoming centers for budget-conscious renters.

According to the report, Miami tops the list of least affordable rental markets, with tenants spending 40.8% of their monthly income on rent. Los Angeles, New York City, San Diego, Boston and Riverside, California, round out the top six cities where renters are considered “cost-burdened” by U.S. Department of Housing and Urban Development standards, paying over 30% of their gross income on housing.

The report noted that Oklahoma City is the most affordable rental market. With an average rent of just $1,040 monthly, residents spend only 18.2% of their monthly income on housing. Other affordable cities include Columbus, Ohio; Austin, Texas; Minneapolis, Minnesota; Kansas City, Missouri; and Indianapolis, Indiana.

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A Senior Financial Advisor, Anthony DeLuca, told GOBankingRates that the changes come from the lingering effects of the COVID-19 pandemic, taxation differences between states and demographic shifts.

“Many Americans were fleeing more liberal-run states to escape the strict COVID restrictions that were enforced,” DeLuca said, explaining the departure from traditionally expensive coastal cities. The rise of remote work has also played a role, allowing people to prioritize space and affordability over proximity to urban centers.

Taxation is another element. States with lower or no state income tax have become increasingly attractive, drawing residents away from high-tax areas. That migration pattern is reshaping rental markets across the country.

Despite the downward trends, it’s important to note that rents remain higher than pre-pandemic levels. On average, renters are paying $293 more monthly than in 2019, a 20.1% increase. However, the increase is roughly in line with overall consumer price inflation over the same period.

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