The Realtor.com August Rental Report reveals a complex landscape of rental affordability across the United States. Despite a slight year-over-year decline in nationwide median rent, the picture varies significantly from one metro area to another.
In August 2024, the national median rent dropped by $5 (-0.3%) compared to the previous year, settling at $1,753. This marks the 13th consecutive month of year-over-year declines, indicating a trend of easing rental prices. However, the current median rent remains just $7 (-0.4%) below the peak observed in August 2022, suggesting that the rental market is far from a full correction.
Rental affordability has seen a modest improvement nationwide. Tenants with typical household incomes now allocate 25.1% of their earnings to rent, down from 25.9% in August 2023. This positive shift is attributed to a combination of declining rents and increasing incomes.
The most significant improvements in affordability were observed in the following Southern markets:
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Miami-Fort Lauderdale-Pompano Beach, FL
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Tampa-St. Petersburg-Clearwater, FL
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San Diego-Chula Vista-Carlsbad, CA
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Nashville-Davidson-Murfreesboro-Franklin, TN
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Charlotte-Concord-Gastonia, NC-SC
These areas have experienced consistent downward trends in rent prices, largely due to an increase in rental supply.
Despite overall improvements, affordability remains a significant concern in several major metros. Of the top 50 metros, six reported rent burdens exceeding 30% of median household income:
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Miami-Fort Lauderdale-Pompano Beach, FL (40.8%)
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Los Angeles-Long Beach-Anaheim, CA (38.7%)
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New York-Newark-Jersey City, NY-NJ-PA (38.1%)
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San Diego-Chula Vista-Carlsbad, CA (35.0%)
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Boston-Cambridge-Newton, MA-NH (33.6%)
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Riverside-San Bernardino-Ontario, CA (31.2%)
Notably, New York is the only market among these where the rent share of income has increased compared to the previous year.
While Southern markets have seen improvements, some Midwest markets have experienced deteriorating affordability. St. Louis, MO, Cincinnati, OH, and Minneapolis, MN have seen faster rent growth, suggesting increased demand in these traditionally more affordable areas.
The most affordable rental markets are concentrated in the heartland, with Oklahoma City, OK leading the pack, followed by Columbus, OH, and Austin, TX.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
