These days, it seems like the price of everything has doubled or tripled, including rent.
Soaring rent prices aren’t new, however. Rent growth has exceeded inflation by 40% from 1985 to 2021, the last year for which full data is available. If rent grew at the same rate as inflation, the average apartment would cost $939 a month instead of $1,163.
Rent has grown at a steady upward trajectory over the years, but wages haven't always kept up. Although the average annual income has nearly tripled since 1985, rent growth has outpaced income growth by 7% in the same time period. Adjusted for inflation, wages have only grown 2% each year in the past decade.
That's why it’s important to keep track of where every dollar goes. Unfortunately for many renters who want to avoid the extra costs of homeownership, 2023 will likely remain an expensive rental market.
In-demand markets can continue to expect an influx of people, causing rent prices to remain elevated. In Charlotte, North Carolina, where the population grew the most since 2009, rent outpaced income by 56%, the third-highest rate among the 50 largest U.S. metros.
Clever's sister site, Real Estate Witch, conducted a study of the most expensive cities for renters in 2023. If you’re not ready to buy a home and are shopping for your next place to rent, here are four expensive cities to avoid and several affordable alternatives for renters.
4 most expensive U.S. cities for renters
On average, U.S. renters pay about 20% of gross monthly income on rent, but in these six cities, rent accounts for 25% or more of their monthly income.
The cities with the highest rent-to-income ratios are:
- Miami, FL (28.5%)
- Los Angeles, CA (25.5%)
- Orlando, FL (25.1%)
- San Diego, CA (25%)
Miami has the highest rent-to-income ratio at 28.5%. Residents in this South Florida locale spend $1,492 a month on rent, which is 28% more than the median U.S. rent price, while earning $62,870 in annual income, which is 9% less than the national median.
Los Angeles is already a notoriously expensive place to live, and it hasn't gotten any more affordable over the past 12 years. The rent-to-income ratio increased 10% from 2009 to 2021. Terrible commutes and the occasional earthquake haven't scared off renters, though, and rent prices remain high while wages remain low.
Orlando, though it's a popular travel destination, has become relatively challenging for locals to afford. The city has one of the fastest-growing populations, which increased 2,072% from 2009-2021. When an exploding population meets limited housing, prices quickly become hard to afford. Rental prices increased 36% more than income from 2009 to 2021.
Finally, San Diego may have great tacos, but with rent rising about 34% more than income, tenants may be hard pressed to afford eating out when housing costs are so high.
Where rent is rising the fastest
San Jose, Denver, and Seattle may not be the most expensive cities in terms of the rent-to-income ratio, but rent is rising so quickly in these cities they could soon find themselves on that list.
Among the 50 largest U.S. metros, rent grew at the fastest rate in these three cities, rising at least 80% from 2009 to 2021:
- San Jose, CA (85%)
- Denver, CO (82%)
- Seattle, WA (81%)
With an astronomical 85% increase in price from 2009 to 2021, San Jose experienced the largest rent hike. A San Jose rental property that cost $1,360 a month in 2009 now rents for nearly double that amount at $2,511.
Rent rose at the second- and third-fastest rates in Denver and Seattle, respectively. In Denver, rent prices exceeded income by 71% from 2009 to 2021, while rent prices eclipsed income by 55% in Seattle. As the home of Microsoft, Amazon, and delicious coffee, it's not surprising that Seattle would make this list.
Most affordable cities for renters
Depending on your ability to relocate, there are still pockets of affordability across the U.S.
If frigid temperatures and snowdrifts that reach the roof are your thing, Providence, Rhode Island; Buffalo, New York; Cleveland; and Pittsburgh are the only four cities among America's 50 largest metros where wage growth outpaced rent growth.
Not surprisingly, these are the only four cities where the rent-to-income ratio declined from 2009 to 2021.
If you're looking for a warmer climate and don't mind living in the desert, head to Las Vegas. Sin City is still one of the most expensive U.S. cities based on its rent-to-income ratio of 23.5%, but there are signs the rental market is starting to cool. From 2009 to 2021, rent increased 23% — the smallest margin among all 50 cities studied. What's more, rent prices actually declined 1% from 2022 to 2023.
Another surprising pocket of affordability is Cincinnati, which has the lowest rent-to-income ratio in the U.S. at 15.5%. With renters earning annual income that's 2% higher than the national median and paying rent prices that are 22% lower than the median, it's no surprise the population of Cincinnati has grown 1,360% since 2009.
Rent prices in Cincinnati have remained relatively stable over the past 12 years. While they soared 71% in Denver from 2009 to 2021, they increased just 8% in Cincinnati during that time period.