Redfin: Amount Renters Need to Earn Drops

(Image courtesy of Redfin; Breakout image courtesy of Maria Orlova/pexels.com)

Redfin, Seattle, found that renters need to earn $63,680 to afford the $1,592 median asking rent for a U.S. apartment, the lowest amount needed since March 2022.

That number is down 0.4% year-over-year and is 6.4% below the all-time high hit in August 2022. A renter in that period would have had to earn $68,000 to afford the typical apartment.

Redfin defines an apartment as “affordable” if the renter spends no more than 30% of their income on rent.

Contributing significantly to the recent results is that renters’ wages have increased. The estimated median income for a renter last year was $54,752, up 5.3% from 2023 and 35.2% from 2019’s $40,505. However, that’s 14% less than the income needed to afford the median monthly rent for a unit.

“Rental affordability will continue improving this year, as wages grow and rents remain flat, thanks to the recent boom in apartment construction,” said Redfin Senior Economist Sheharyar Bokhari. “The affordability gap between renting and buying is likely to widen further in 2025, as home prices rise and mortgage rates remain high. That means potential homebuyers–especially from younger generations–may decide to continue renting for longer, as it’s the only affordable option.”

The most affordable spot for renters is Austin, Texas, where they earn a median salary of $69,781, giving them 25.1% more than they need to afford the typical apartment. Austin is followed by Houston, Dallas, Salt Lake City, and Raleigh, N.C.

Providence, R.I., was deemed the least affordable–renters earn a median $50,408, or 41.3% less than what they need to afford the typical apartment. Also in the top five for that metric are Miami, New York City, Los Angeles and Boston.