Rents have outpaced wages in nearly 9 out of
10 major metros since 2019
- Since 2019, U.S. rents have grown 30.4%, while wages have grown
20.2%. Rents have outpaced wages in 44 of the 50 largest U.S. metro
areas.
- Wages caught up last year nationally and in about half of major
metros.
- In New York City, rents grew
more than seven times faster than wages last year — the largest gap
in the country.
SEATTLE, May 7, 2024
/PRNewswire/ -- Rent prices have surged in recent years, and wages
have not kept pace. While last year was a bright spot — wages grew
faster than rents nationally and in almost half of major U.S. metro
areas — the opposite was true in New York
City, where the nation's largest gap emerged.
Since 2019, U.S. rents have grown 1.5 times faster than wages,
according to a new analysis of rental data from Zillow® and
StreetEasy®, along with wage data from the Bureau of Labor
Statistics.1 Demand for rentals from the
large millennial generation — many of whose members have remained
renters longer than previous cohorts — and Gen Z adults has run
headlong into the country's housing shortage, causing rents to
quickly rise.
That trend cooled last year, as national rent growth (3.4%) was
outpaced by wage growth (4.3%). Strong multifamily construction has
helped absorb demand for apartments, keeping rent growth in check
in much of the country. But rents grew more than seven times faster
than wages across New York City's
five boroughs last year. That gap between rent growth (8.6%) and
wage growth (1.2%) in New York
City was larger than in any of the 50 biggest U.S. metro
areas.
"It is encouraging to see much of the country making even modest
progress in the rental affordability crisis. Unfortunately,
New York City is heading in the
opposite direction," said StreetEasy Senior Economist Kenny Lee. "Despite a strong job market in the
city, and in some ways because of it, the gap between what a
typical renter can afford and the price of rentals on the market is
growing. New multifamily buildings coming online has eased
competitive pressure in many markets, but in New York City, construction just simply can't
keep up with demand."
Moderating rent growth across the country has given wages a
chance to catch up, providing a reprieve for renters in many
markets. Rents dipped in three markets last year — Austin; Portland,
Oregon; and San Francisco —
while wages continued to grow. In 20 other metros, rents grew, but
wages grew faster, giving renters some breathing room.
Florida markets occupy three of
the five spots where rent growth has most dramatically outpaced
wage growth over the past five years. Florida has been a migration hot spot since
the pandemic, with new residents attracted by the possibility of
year-round outdoor living and relatively affordable housing
compared to many coastal markets.
This surge in demand has led to skyrocketing rents in the state,
while wages have struggled to keep up. Even in Miami, where wage growth has been slightly
above the national average, a nearly 53% increase in rents — the
most dramatic jump of any U.S. market — has left a huge gap between
the income residents are earning and the income they need to
comfortably afford the area's typical rental.
Wages have consistently outpaced rents in recent years in only
six major metros. The biggest gaps have been in San Francisco, San
Jose and Houston.
Zillow and StreetEasy tools
Zillow and
StreetEasy have a number of tools that help renters with
affordability and access.
The upfront costs of finding a place to rent can add up, with
Zillow research showing those costs tend to be higher for renters
of color. In New York City,
upfront costs average almost $10,500,
with broker fees often the largest expense. Lowering upfront rental
costs will give all New Yorkers expanded choices in the rental
market, which is one of the reasons Zillow and StreetEasy are
advocating for broker fee reform.
For all apartment buildings, Zillow includes a "costs &
fees" breakdown to help renters gauge the full affordability
picture by highlighting certain onetime costs, such as application
fees and security deposits, as well as recurring costs, such as
parking. While the typical renter nationally pays $60 in
application fees across all the rentals they applied for, Zillow
offers a universal rental application that allows renters to apply
to an unlimited number of participating rentals for 30 days for a
flat fee of $35.
Zillow rental listings also include rooms for rent — individual
rooms in units or homes — bringing more affordable rentals online.
Renters using Zillow can include "room" listings in their searches
alongside traditional "entire place" options.
|
2019–2023
|
2023
Only
|
Metro
Area*
|
Rent
Increase
|
Wage
Increase
|
Difference
(Percentage Points)
|
Rent
Increase
|
Wage
Increase
|
Difference
(Percentage Points)
|
United
States
|
30.4 %
|
20.2 %
|
10.2
|
3.4 %
|
4.3 %
|
-0.9
|
New York
City**
|
27.5 %
|
11.2 %
|
16.3
|
8.6 %
|
1.2 %
|
7.4
|
Los Angeles,
CA
|
22.2 %
|
17.2 %
|
5.0
|
2.0 %
|
2.7 %
|
-0.7
|
Chicago, IL
|
22.3 %
|
8.5 %
|
13.8
|
5.4 %
|
-0.1 %
|
5.5
|
Dallas, TX
|
29.0 %
|
19.5 %
|
9.5
|
1.1 %
|
2.0 %
|
-0.9
|
Houston, TX
|
20.6 %
|
24.4 %
|
-3.8
|
2.7 %
|
8.0 %
|
-5.3
|
Washington,
DC
|
18.0 %
|
12.8 %
|
5.2
|
4.6 %
|
3.5 %
|
1.1
|
Philadelphia,
PA
|
24.2 %
|
14.8 %
|
9.4
|
4.0 %
|
2.0 %
|
2.0
|
Miami, FL
|
52.6 %
|
20.4 %
|
32.2
|
2.4 %
|
3.6 %
|
-1.2
|
Atlanta, GA
|
35.6 %
|
12.2 %
|
23.4
|
0.3 %
|
0.2 %
|
0.1
|
Boston, MA
|
22.4 %
|
13.4 %
|
9.0
|
5.8 %
|
-1.0 %
|
6.8
|
Phoenix, AZ
|
39.1 %
|
16.6 %
|
22.5
|
0.9 %
|
3.4 %
|
-2.5
|
San Francisco,
CA
|
3.4 %
|
12.0 %
|
-8.6
|
-0.1 %
|
2.6 %
|
-2.7
|
Riverside,
CA
|
41.4 %
|
23.3 %
|
18.1
|
3.1 %
|
5.9 %
|
-2.8
|
Detroit, MI
|
31.4 %
|
22.0 %
|
9.4
|
3.6 %
|
4.2 %
|
-0.6
|
Seattle, WA
|
19.7 %
|
7.7 %
|
12.0
|
2.5 %
|
2.6 %
|
-0.1
|
Minneapolis,
MN
|
13.5 %
|
17.1 %
|
-3.6
|
2.7 %
|
5.6 %
|
-2.9
|
San Diego,
CA
|
36.6 %
|
18.8 %
|
17.8
|
3.1 %
|
1.4 %
|
1.7
|
Tampa, FL
|
50.0 %
|
15.3 %
|
34.7
|
2.7 %
|
0.4 %
|
2.3
|
Denver, CO
|
23.1 %
|
20.3 %
|
2.8
|
3.0 %
|
5.1 %
|
-2.1
|
Baltimore,
MD
|
22.8 %
|
8.0 %
|
14.8
|
3.5 %
|
2.6 %
|
0.9
|
St. Louis,
MO
|
31.2 %
|
22.6 %
|
8.6
|
5.4 %
|
5.6 %
|
-0.2
|
Orlando, FL
|
36.3 %
|
17.4 %
|
18.9
|
1.0 %
|
-0.3 %
|
1.3
|
Charlotte,
NC
|
33.9 %
|
13.4 %
|
20.5
|
1.7 %
|
4.5 %
|
-2.8
|
San Antonio,
TX
|
22.3 %
|
15.2 %
|
7.1
|
0.3 %
|
3.6 %
|
-3.3
|
Portland, OR
|
21.0 %
|
24.0 %
|
-3.0
|
-0.2 %
|
2.9 %
|
-3.1
|
Sacramento,
CA
|
28.6 %
|
16.2 %
|
12.4
|
3.0 %
|
1.6 %
|
1.4
|
Pittsburgh,
PA
|
22.7 %
|
12.5 %
|
10.2
|
4.7 %
|
3.0 %
|
1.7
|
Cincinnati,
OH
|
36.5 %
|
15.2 %
|
21.3
|
7.3 %
|
0.9 %
|
6.4
|
Austin, TX
|
23.1 %
|
13.6 %
|
9.5
|
-2.3 %
|
2.4 %
|
-4.7
|
Las Vegas,
NV
|
34.3 %
|
14.4 %
|
19.9
|
2.2 %
|
0.2 %
|
2.0
|
Kansas City,
MO
|
33.3 %
|
10.1 %
|
23.2
|
6.1 %
|
4.9 %
|
1.2
|
Columbus, OH
|
30.6 %
|
21.9 %
|
8.7
|
6.0 %
|
4.3 %
|
1.7
|
Indianapolis,
IN
|
37.2 %
|
6.6 %
|
30.6
|
4.5 %
|
2.7 %
|
1.8
|
Cleveland,
OH
|
32.1 %
|
16.4 %
|
15.7
|
5.1 %
|
0.8 %
|
4.3
|
San Jose, CA
|
6.0 %
|
12.5 %
|
-6.5
|
0.8 %
|
6.6 %
|
-5.8
|
Nashville,
TN
|
29.1 %
|
17.7 %
|
11.4
|
0.6 %
|
2.6 %
|
-2.0
|
Virginia Beach,
VA
|
35.5 %
|
25.3 %
|
10.2
|
4.9 %
|
5.2 %
|
-0.3
|
Providence,
RI
|
44.2 %
|
22.4 %
|
21.8
|
7.3 %
|
3.4 %
|
3.9
|
Jacksonville,
FL
|
36.7 %
|
9.7 %
|
27.0
|
0.1 %
|
0.0 %
|
0.1
|
Milwaukee,
WI
|
25.8 %
|
26.3 %
|
-0.5
|
5.9 %
|
5.5 %
|
0.4
|
Oklahoma City,
OK
|
28.9 %
|
19.7 %
|
9.2
|
4.2 %
|
2.5 %
|
1.7
|
Raleigh, NC
|
30.7 %
|
15.2 %
|
15.5
|
1.1 %
|
4.9 %
|
-3.8
|
Memphis, TN
|
36.0 %
|
13.1 %
|
22.9
|
1.4 %
|
-1.1 %
|
2.5
|
Richmond, VA
|
33.3 %
|
32.1 %
|
1.2
|
3.1 %
|
5.7 %
|
-2.6
|
Louisville,
KY
|
31.7 %
|
23.0 %
|
8.7
|
6.1 %
|
4.4 %
|
1.7
|
New Orleans,
LA
|
24.1 %
|
18.1 %
|
6.0
|
2.8 %
|
4.7 %
|
-1.9
|
Salt Lake City,
UT
|
33.4 %
|
28.6 %
|
4.8
|
0.8 %
|
5.5 %
|
-4.7
|
Hartford, CT
|
35.5 %
|
7.6 %
|
27.9
|
7.1 %
|
3.9 %
|
3.2
|
Buffalo, NY
|
35.5 %
|
12.8 %
|
22.7
|
6.2 %
|
0.7 %
|
5.5
|
|
*Table ordered by
market size
|
**Includes only New
York City's five boroughs
|
About Zillow Group
Zillow Group, Inc.
(Nasdaq: Z and ZG) is
reimagining real estate to make home a reality for more and
more people. As the most visited real estate website in
the United States, Zillow
and its affiliates help people find and get the home they
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and agents, and easier buying, selling, financing and renting
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All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
1 Annual rent growth nationally and
for the 50 largest U.S. metropolitan areas (excluding the
New York City metro area) is
captured using the Zillow Observed Rent Index (ZORI) from 2019 to
2023 and 2022 to 2023. Annual rent growth for New York City is captured using StreetEasy's
citywide median asking rent over the same time periods. Wage growth
figures analyze the change in average hourly earnings from 2019 to
2023 and 2022 to 2023 using data from the Bureau of Labor
Statistics for the U.S., the 50 largest U.S. metropolitan areas and
New York City proper.
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multimedia:https://www.prnewswire.com/news-releases/new-york-city-rents-grew-seven-times-faster-than-wages-last-year-tightening-affordability-crunch-302137816.html
SOURCE Zillow