While owning a home may be a dream for many, not everyone wants to take on the burden of buying a house. For many, renting is a more cost-effective and convenient approach, as there’s no need to worry about repairs and maintenance costs.
Because so many people pay the rent every month, it’s important to understand the rental market. If you’re curious about what renting looks like from a range of angles, here are 20 insightful rent statistics worth checking out.
1. 42% of Renters Commit More Than One-Third of Their Income to Housing
In comparison to homeowners, renters dedicate more of their income to housing. A shocking 42% of renters spend more than one-third of their household’s income on housing. Homeowners usually only commit 24% of their household’s income to their mortgage.
[Source: Freddie Mac]
2. 38% of Renter Households Are Rent-Burdened
Of renter households, 38% are considered rent-burdened. Usually, this means that their housing costs exceed 30% of their income. Additionally, they may have trouble affording various necessities, like food, transportation, clothing, and required medical care.
If more than 50% of a household’s income goes to rent, it may be considered severely rent-burdened. At that stage, the chance of financial difficulties, including handling other necessary living expenses, is incredibly high.
3. 30% of Renters Spend More Than They Originally Budgeted on Housing
When it comes to rental prices, 30% of renters end up spending more than they originally budgeted. Of the remaining renters, 50% found a property that aligned with their budget, while 20% snagged a place for less than they had allocated.
4. Vacancy Rates Hit 30-Year Low at Just 6.8%
In mid-2019, rental vacancy rates came in at 6.8%, representing a 30-year low. For professionally-managed apartment buildings, the vacancy rate was below 5% in 135 of the 150 major markets. For 45 of those markets, the vacancy rate was actually under 3%
5. Only 45% of Renters Can Afford to Buy a Home in Their City
Affordability is commonly cited as the reason why renters choose to rent instead of buy. Overall, just 45% of renters could reasonably afford to buy a median-priced home where they live. However, in high-cost markets – like much of the West Coast and the Northeast – as little as 10% of local renters can potentially afford to buy.
6. 84% of Renters Believe They Are Making the Affordable Choice
Real estate markets can shift quickly, transitioning from a buyer’s to a seller’s market and back again with surprising ease. When home prices go up, many people start viewing renting as a more affordable option. Right now, 84% of renters believe they are making the economical choice when it comes to housing. That’s 17 points higher than in 2018 and appears to be an all-time high.
[Source: Freddie Mac]
7. On Average, Renting a One-Bedroom Apartment Costs $962 a Month
In the United States, renting an average one-bedroom apartment sets a household back $962 a month (as of July 2020). For a two-bedroom apartment, the monthly cost heads over the four-figure threshold, coming in at $1,193.
[Source: Apartment List]
8. There are 43 Million Renters in the United States
The number of renters in the country ebbs and flows depending on housing market conditions, average wages, and more. Currently, there are approximately 43 million renters in the United States.
9. 42% of Renters Live in Single-Family Homes
When most people think of renting, they envision apartment living. However, most renters actually live in single-family homes. Overall, 42% are in houses.
Of the remaining renters, 37% of renters live in apartments (buildings with at least five units). Another 17% are in buildings with two to four units, while the remaining 5% are renting mobile homes.
[Source: National Multifamily Housing Council]
10. 5% of Renters Use Housing Assistance to Help Pay Rent
Housing assistance is a critical resource. Government or non-profit organization housing vouchers are used by 5% of renters, covering all or part of their housing costs.
11. New Mexico’s One-Bedroom Rent Price Increased 24.34% in a Year, Outpaces Every Other State
When you think about high rent costs, places like New York and California usually come to mind. But many people are shying away from higher-cost areas, causing states that are viewed as more affordable to see surges.
From Q2 2019 to Q2 2020, New Mexico actually had the biggest increase in one-bedroom apartment rental prices, coming in at 24.34%. In second was New York, with a rise of 21.99%.
Rounding out the top five are Missouri (21.06%), West Virginia (18.91%), and Arkansas (11.81%).
[Source: Apartment Guide]
12. Hawaii’s One-Bedroom Rent Price Fell by 22.55%, More Than Any Other State
On the other side of the spectrum, rent prices are tumbling in Hawaii. The average cost for a one-bedroom apartment fell from $2,318.74 to $1,795.91 between Q2 2019 and Q2 2020. That’s a 22.55% decline.
Other states with falling prices include Wyoming, which fell 21.02%, and Kansas, with a 13.41% decline. Rounding out the top five biggest tumbles are Utah (11.49%) and Montana (10.85%).
[Source: Apartment Guide]
13. St. Louis Sees Largest One-Bedroom Rent Increase Among Major Cities at 44.9%
Leading the way for major cities, St. Louis saw one-bedroom rents go up by 44.9% between Q2 2019 and Q2 2020. In second was Sacramento, coming in with a 40.3% increase.
However, Sacramento did actually rank number one for studio apartment rents with an increase of 49.30% between Q2 2019 and Q2 2020.
[Source: Apartment Guide]
14. COVID-19 Drove Average Rent Prices Down in 7 of the 10 Priciest Markets
The COVID-19 pandemic led to widespread unemployment. Many households found themselves in financial binds or, at least, not in as comfortable a position as they were previously. As a result, many looked to reduce one of their biggest expenses: housing.
In seven of the ten priciest housing markets, rents declined significantly. For one-bedroom apartments, the year-over-year percentage decrease was larger in August than July, averaging at about -5%.
15. More Than Two-Thirds of Renters Move Because of a Rent Increase
When it comes to reasons for moving, 69 percent of renters cite a rent hike as the reason they headed for the door. Of that 69%, 30% said the change in price was a major factor, while 39% stated that it impacted their decision, but only to some extent.
16. The Average Rent Increase for Households That Decided to Move Was $125
The size of a rent increase can impact a household’s decision to move. Of renters that found a new property, the average rent increase at their previous rental was $125 a month.
A smaller increase might not be enough to have the renters looking for a new option. Of renters that stayed put, their average increase was just $50 a month.
17. The Cost of Eviction for Non-Payment Can Reach $10,000
When a tenant doesn’t pay rent, many landlords launch evictions proceedings. The goal is to have the person vacate the property, allowing it to be rented out to someone who stays current with their rent and allowing it to be a source of income for landlords. However, that decision itself is incredibly costly.
Eviction proceedings can come with a price tag as high as $10,000. Even on the low end, it usually runs at least $3,500.
18. 48% of Affluent Millennial Parents Expect to Pay All of Their Child’s Rent
Nearly half of wealthier Millennial parents don’t expect their child to handle all of their rent costs. A startling 48% anticipate taking care of the entire cost. In comparison, only 18% of affluent parents across all generations expect to shoulder that burden for their children.
19. On Average, Renter’s Insurance Costs $15 a month
Renter’s insurance costs far less than homeowner’s, mainly because a renter only needs to insurer their personal property, not the building itself. On average, renter’s insurance costs just $15 a month or $180 a year.
[Source: Insurance Information Institute]
20. When It Comes to New Apartment Construction, 61% of Buildings have 50+ Units
For new apartment buildings, bigger is apparently better in the eyes of the investors. 61% of the new construction projects involve at least 50 units.
In comparison, back in the 2000s, only 27% of new apartment buildings included 50 or more units. That’s a 34 point increase.