Special Report

Cities Where Rent Takes the Highest Share of Income

Rents are skyrocketing in many metro areas, according to the February Rental Report from Realtor.com. The median rental price in the 50 largest metro areas reached a new high of $1,792 in February, up 17% from February of 2021. The report also notes that renters earning a typical household income devoted 29.7% of their income to rent.

According to the U.S. Department of Housing and Urban Development, households paying over 30% of their monthly income on housing (including utilities) are categorized as cost-burdened households. 

To determine the least affordable rental markets, 24/7 Wall St. reviewed rental burden data in major metro areas from the February 2022 Rental Report from Realtor.com. Rental burden is the percentage of an area’s median household income needed to pay median rent. In 14 of the nation’s largest metro areas, rent expenses exceed 30% of the median household income. Here are 20 cities where the middle class can no longer afford housing.

The increase in rental prices is largely due to a shortage of rental units relative to demand. The competitive housing market has priced many potential first-time buyers out of the market, requiring them to continue renting. Some of the least affordable rental markets – including Miami, Tampa, Florida, and San Diego – are also among the most competitive housing markets. This is the American city with the most million-dollar housing markets.

Markets in these Florida and California cities reflect a decade-long trend of population increase in certain Sun Belt metro areas that has led to housing competition. The vast majority of the 14 metros with the least affordable rental markets are in the Sun Belt, including three in Florida and five in California. 

Miami had the fastest growing rent prices in February, with median rent spiking 55.3% from the previous February. Miami also tops the list as the least affordable rental market, with renters shelling out 59.5% of their income on rent. According to HUD, households paying over 50% of their income on housing are categorized as severely cost burdened.

The Los Angeles and Riverside, California, metro areas follow Miami, with renters spending over 45% of income on rent. Median rents in the top three cities exceed $2,600. Metro areas on the list that lie outside of the Sun Belt include Memphis, Tennessee, Cleveland, and New York.

Click here to see the least affordable rental markets

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.