According to a new analysis by Zillow, the average renter would need his or her income to grow by $168 to keep up with an expected 1 percent rise in rents over the next year. Many renters, however, would need more—in some cases, much more—to keep costs manageable.
Renters in Seattle, Los Angeles, Boston, Sacramento, and Orlando would be in need of the biggest pay bumps, according to the analysis. In Seattle, renters would need an additional $1,248, while in Orlando, renters would need an additional $672. Renters in San Antonio, Detroit, Las Vegas, Austin and Columbus would be in need of the smallest—$84 in San Antonio and $264 in Columbus.
“For a long time now, renters have faced an affordability crisis when it comes to housing, and renters in some hot markets will still need significant raises just to keep up with rising rents,” says Dr. Svenja Gudell, chief economist at Zillow. “Incomes have a ways to go to bring rental affordability closer to historical levels, but recent gains are being met with slowing rent appreciation—a welcome sign for renters.”
Appreciation is grinding to a halt in many major metropolitan areas—conditions which, combined with growing incomes, make them ideal for renters. These include New York, Chicago, Houston and Miami, according to the analysis.
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