Monthly apartment rents might be growing at a slower pace, but they are still too high for a large chunk of U.S. renters.
According to the Cost Burden Report released by Apartment List earlier this month, 51.8% of all renter households in the United States as of last year were spending more than 30% of their incomes on rent.
That’s an important figure: Many financial experts say that households should not spend more than 30% of their gross monthly income on housing costs. But according to the Apartment List study, 22 million renter households were spending more than this on their monthly apartment rent as of the end of 2023.
That is an increase of 226,000 since 2022 and represents an all-time high in the United States.
The situation is even worse for many renters. Apartment List found that 11.2 million, or 26.4% of all U.S. renter households, are severely cost-burdened, meaning that they are spending more than half of their gross monthly income on rent.
The numbers show, too, that just 48% of U.S. renter households are hitting the goal of spending less than 30% of their income on housing.
Why are so many renters facing this challenge? Apartment List pointed to the record-setting growth of apartment rents that took place in 2021 and 2022. Even though rent growth has since moderated, renters’ incomes have not caught up to the boom in rental prices.
The situation is not as bad in all parts of the country, though. Apartment List reported that all 10 of the 100 largest metropolitan areas with the greatest percentage of cost-burdened renters were in either Florida or California.
Des Moines, Iowa, has the nation’s lowest renter cost-burden rate among the United States’ 100 largest metropolitan areas. But, as Apartment List points out, even here 43% of renters were spending more than 30% of their gross monthly income on rent as of the end of 2023 and more than one in five were spending more than 50%.
Other Midwest cities ranking among the 10 with the lowest percentage of cost-burdened renters were Toledo, Ohio; Wichita, Kansas; and Omaha, Nebraska.
