Rents in the United States hit a record high in April, according to real estate listing site Realtor.com, with rents rising 16.7% compared to the previous year. In contrast, over the previous five years, gross rents increased by 18.1%.
Rising housing costs have put a serious squeeze on the millions of Americans, typically younger ones, who already cannot afford to own a home. Many of those who are already being affected by inflation are likely looking to live in places with more affordable rentals.
To determine the towns with the lowest rent, 24/7 Wall St. reviewed five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey. We defined towns as census places having at least 1,000 people and less than 25,000 people. The median gross rent across the United States is $1,096, and in these 50 towns, it ranges from $498 to as low as $279.
Arizona and Mississippi have the most places on this list, with five each. Kentucky, North Carolina, and Tennessee have four each. Just under two-thirds of the towns on this list are in the South, nine are in the Midwest, six in the West, and just three in the Northeast.
Broadly speaking, housing costs reflect the income levels of the population living there. Housing costs tend to be more expensive in wealthier communities, while places with high levels of poverty tend to have cheaper housing. The 50 towns on the list are some of the poorest parts of the country. All but two have lower median household incomes compared to the national figure of $5,416 per month. In Waldoboro, Maine, which has the lowest median gross rent, at $279, the typical household has a monthly income of $1,240, the lowest figure out of the 5,375 towns with data available. This is the poorest town in every state.
But even when accounting for these lower incomes, many of these cities have more affordable rental units compared to the country as a whole. Nationwide, the annual median gross rent is equivalent to 29.6% of the median household income. In 24 of the 50 cities on this list, median rent accounts for a smaller share of income. In San Carlos, Arizona, rent costs amount to 11.9% of household income. These are the states with the lowest and highest rent.
To determine the towns with the lowest rent, 24/7 Wall St. reviewed five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey.
We used census “place” geographies — a category that includes incorporated legal entities and census-designated statistical entities. We defined towns based on population thresholds — having at least 1,000 people and less than 25,000 people.
Towns were excluded if median gross rent was not available in the 2020 ACS, if there were fewer than 500 renter-occupied housing units, or if the sampling error associated with a town’s data was deemed too high.
The sampling error was defined as too high if the coefficient of variation — a statistical assessment of how reliable an estimate is — for a town’s median gross rent was above 15% and greater than two standard deviations above the mean CV for all towns’ median gross rents. We similarly excluded towns that had a sampling error too high for their population, using the same definition.
Towns were ranked based on the median gross rent. To break ties, we used the median gross rent as a share of household income.
Additional information on median gross rent as a share of household income, share of households occupied by renters, and median home value are also five-year estimates from the 2020 ACS.
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