Home prices have been rising faster than incomes, and builders aren't able to keep up with the demand for affordable housing. In Los Angeles for example, rent costs more than 100% of the typical income for the lowest-earning residents.
- Residents in 16 cities across America are spending a higher share of their income on rent than the national level, according to Zillow.
- It's toughest for low-income earners.
- Home prices have increased faster than incomes since the recession, and rising mortgage rates are making the market more expensive.
Housing is getting more unaffordable across America.
That's largely because since the recession, home prices have been rising faster than incomes, and builders aren't able to keep up with the demand for affordable housing.
It's affecting both homeowners who pay mortgages and people who rent. According to Zillow, the median US rent requires 28.4% of the median income, up from the historic average of 25.8%.
The financial burden is worst for low-income renters. In Los Angeles for example, rent costs more than 100% of the typical income for the lowest-earning residents. "That leaves few options to realistically afford rent and other expenses on a typical income, outside of a housing subsidy, doubling up with roommates or taking on a second or even a third job to help make ends meet," Zillow said in its report.
The list below, based on Zillow's data, highlights the US cities where the share of income spent on rent during the second quarter was higher than the overall national level of 28.40%, and is ranked from the least to the most. Financial planners generally recommend spending no more than 30% of gross income on rent.
In all 16 cities, renters are spending more of their money on housing than the historic trend.
Dallas-Fort Worth, Texas
Median income: $54,876
Share of income spent on rent: 28.40%
Historic share of income spent on rent (1985-2000): 21.8%
Sources: Zillow, Census Bureau
Houston, Texas
Median income: $47,010
Share of income spent on rent: 28.80%
Historic share of income spent on rent (1985-2000): 24.40%
Sources: Zillow, Census Bureau
Portland, Oregon
Median income: $58,423
Share of income spent on rent: 29.90%
Historic share of income spent on rent (1985-2000): 23.50%
Sources: Zillow, Census Bureau
Seattle, Washington
Median income: $74,458
Share of income spent on rent: 30.90%
Historic share of income spent on rent (1985-2000): 23.80%
Sources: Zillow, Census Bureau
Tampa, Florida
Median income: $45,874
Share of income spent on rent: 31%
Historic share of income spent on rent (1985-2000): 27.60%
Sources: Zillow, Census Bureau
Orlando, Florida
Median income: $44,007
Share of income spent on rent: 31.50%
Historic share of income spent on rent (1985-2000): 22.70%
Sources: Zillow, Census Bureau
Denver, Colorado
Median income: $56,258
Share of income spent on rent: 32%
Historic share of income spent on rent (1985-2000): 23.60%
Sources: Zillow, Census Bureau
Sacramento, California
Median income: $52,071
Share of income spent on rent: 32.40%
Historic share of income spent on rent (1985-2000): 31.80%
Sources: Zillow, Census Bureau
Boston, Massachusetts
Median income: $58,516
Share of income spent on rent: 32.70%
Historic share of income spent on rent (1985-2000): 26.40%
Sources: Zillow, Census Bureau
San Jose, California
Median income: $90,303
Share of income spent on rent: 35.60%
Historic share of income spent on rent (1985-2000): 26.10%
Sources: Zillow, Census Bureau
Riverside, California
Median income: $58,979
Share of income spent on rent: 36.80%
Historic share of income spent on rent (1985-2000): 32.70%
Sources: Zillow, Census Bureau
New York, New York
Median income: $55,191
Share of income spent on rent: 37.70%
Historic share of income spent on rent (1985-2000): 26.30%
Sources: Zillow, Census Bureau
San Francisco, California
Median income: $87,701
Share of income spent on rent: 39.20%
Historic share of income spent on rent (1985-2000): 30.60%
Sources: Zillow, Census Bureau
San Diego, California
Median income: $68,117
Share of income spent on rent: 40.30%
Historic share of income spent on rent (1985-2000): 34.70%
Sources: Zillow, Census Bureau
Miami-Fort Lauderdale, Florida
Median income: $41,645
Share of income spent on rent: 40.30%
Historic share of income spent on rent (1985-2000): 28.60%
Sources: Zillow, Census Bureau
Los Angeles-Long Beach-Anaheim, California
Median income: $55,151
Share of income spent on rent: 46.90%
Historic share of income spent on rent (1985-2000): 36.30%
Sources: Zillow, Census Bureau