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Renters just can't catch a break, with April's average US rent rising to just a hair below $2,000.
According to the latest Zillow report, prospective tenants now need to earn $79,889 to spend no more than 30% of their income on rent — a common threshold used to mark affordability. That's $21,197 more than in 2019, or a 36% pricing upsurge.
In this five-year timespan, wages haven't been able to keep pace with US rent growth, which has appreciated 1.5 times faster than income, the real estate firm said. Since the pandemic's start, rent has increased 31.4%, though income has only grown 23% through February.
This trend still holds true in most cities, such as New York, Boston, Cincinnati, and Buffalo, Zillow added in a separate report. On a monthly basis, Oklahoma City was the only metro area to see rents fall in April.
But the sector is showing some slight improvement. Although rents continue to climb, strong multifamily construction has softened upside momentum, providing some relief amid a severe housing shortage. Supply has previously stood so low that half of tenants spent over 30% of income on rent, Harvard researchers reported in January.
Yet last year, national rent growth was finally eclipsed by wage growth, both rising 3.4% and 4.3%, respectively.
Zillow also found that typical multifamily rent outpaced single-family homes on a monthly basis, reversing a pattern that first emerged in July.
Still, the surge in rental pricing has locked many tenants out of potential homeownership. And while a financial strain for many, renting is expected to remain much cheaper than buying for a long time, according to a CBRE note from March.
Homebuyers have faced similar challenges as renters, navigating a market that is burdened by low inventory. Added headwinds also include high mortgage rates and rising insurance costs in some parts of the country.
According to Redfin, the median US monthly housing payment has swung to a new record high, hitting $2,894 in the four weeks through May 5.
