Rent Increases by Decade | Rent Increases by Unit Size | Rent Prices vs. Income | Why Rent Prices Are Increasing | Rent Price Increases by Metro | Rent Prices vs. Housing Prices | Rent-to-Income Ratios by Metro | Most Expensive Cities, Ranked
💰 How much have rent prices increased?
From 1985 to 2020, rent prices increased 149%, while income grew just 35%.
It’s not just home prices. Rental rates are rising to record highs across the U.S.
After declining by as much as 20% in some urban metros at the height of the COVID-19 pandemic, rent prices have rebounded — doubling the 2% growth rate that was common across the U.S. in 2019, according to our research.
A lack of affordable housing is driving these staggering rate hikes. Home values increased 17% in 2021, pricing many would-be homeowners out of the market. As a result, demand for rental units has spiked. But with vacancy rates falling to 5.6% in 2021 — the lowest rate since 1984 — landlords have the power to mark up prices for a limited number of available units.
Meanwhile, wages aren’t keeping pace with rising rent prices, and 58% of renters are currently living paycheck to paycheck.
To determine how these economic shifts impact American tenants, we analyzed publicly available data from the U.S. Department of Housing and Urban Development, the Federal Reserve Bank of St. Louis, and the U.S. Census Bureau.
We found that the affordable housing crisis in the U.S. is widening the growing divide between rent prices and income. From 1985 to 2020, the national median rent price rose 149%, while overall income grew just 35%.
With rent rising about 4x faster than income since 1985, Americans are forced to move to cheaper, subpar units or spend significantly more of their earnings on rent.
Financial experts advise spending no more than 30% of gross monthly income on housing, but the rent-to-income ratio exceeds that recommendation in 10% of the 50 largest U.S. metros. Furthermore, 92% of those metros have a rent-to-income ratio higher than the national ratio of 17%.
Read on to learn more about rent prices versus income and how it impacts renters across the country.
📈 Rent Prices vs. Income Statistics
- From 1985 to 2020, rent prices increased 149%, while income grew just 35%.
- Rent prices have increased about 4x faster than income during that time period.
- If rent prices grew at the same rate as income since 2000, the median rent in 2020 would cost about 34% less — $586 per month instead of $894.
- From 1985 to 2020, the median U.S. rent-to-income ratio nearly doubled from 9% to 17%.
- The rent-to-income ratio is 89% higher for millennials than it was for baby boomers at the same age in 1985.
- The average baby boomer in their 30s earned $48,113 and paid $359 for an apartment in 1985, a 9% rent-to-income ratio.
- The average millennial in their 30s earned $64,994 in 2020 and paid $894 for a rental unit, a 17% ratio.
- Since 2000, median rent prices have outpaced inflation by 29%.
- Median rent prices grew 90%, while inflation grew 70%.
- From 2000 to 2022, median home prices increased 156% nationwide, while median rent prices increased 90%.
- Rent hikes outpaced home price gains in seven metros:
- New Orleans
- Birmingham, Alabama
- Richmond, Virginia
- San Antonio
- Nashville, Tennessee.
- Rent hikes outpaced home price gains in seven metros:
- Five of the 50 most-populous metros have a rent-to-income ratio higher than the recommended 30%:
- San Francisco (48%)
- San Diego (40%)
- Miami (33%)
- San Jose, California (32%)
- Los Angeles (31%)
- Metros with the lowest rent-to-income ratio include:
- St. Louis (12%)
- Oklahoma City (13%)
- Cincinnati (16%)
Rent Price Increases Have Exceeded Income Increases by 325% Since 1985
Rent prices have spiked over time — far outpacing modest income gains that have remained relatively flat.
From 1985 to 2020, the national median rent price rose from $359 to $894 — a 149% increase. In the same time frame, overall median income grew just 35% — from $48,113 to $64,994.
As a result, Americans have experienced a steep decline in their purchasing power across the last four decades.
|Year||Median Monthly Rent||% Rent Increase Since 1985||Median Annual Income||% Income Increase Since 1985|
Rent prices have grown at an even faster pace since the onset of the pandemic. Since 2020, rent has increased 8% — a rate that’s higher than any other two-year span at the start of a new decade:
- From 1990 to 1992, rent prices grew 7.4%.
- From 2000 to 2002, rent prices grew 5.7%.
- From 2010 to 2012, rent prices declined 1.3%.
The last time rent prices declined was in 2012. After that, rates increased about 2% a year on average until 2021, when they jumped 3.8% to $928 a month. Rent hikes remain strong in 2022, growing 3.7% to $962 a month.
What If Rent Price Growth Matched Income Growth?
If median rent prices grew at the same rate (16%) as median income since 2000, the median overall rent in 2020 would cost $587 per month instead of $894 — about 34% less.
|Unit Size||2020 Rent Price (Actual Growth Rate)||2020 Rent Price (If Equal to Income Growth Rate)||% Difference|
Rent Increases by Unit Size
The consistent preference for more space has driven the median monthly rate for a three-bedroom rental up 169% since 1985 — the greatest increase among all units.
However, one-bedroom apartments have shown the most rapid growth in the past two years as millennials — now predominantly in their 30s — want a place of their own without roommates.
As millennials get married and have children, demand for multiple-bedroom apartments could tick back up in the next decade. In fact, about 36% of cities are building larger apartments to accommodate growing families, remote work, and online learning.
Whether families will be able to afford it is another matter.
|Unit Size||Median Rent (1985)||Median Rent 2020||Median Rent (2022)||Rent Increase (1985–2022)||Rent Increase (2020–2022)|
The Rent-to-Income Ratio Has Nearly Doubled Since 1985
The rent-to-income ratio in the U.S. was nearly 17% in 2020 — almost double the 9% ratio from 1985.
Although today’s rent-to-income ratio is still well below the 30% experts recommend for financial health, affordable housing is becoming increasingly elusive for younger generations who spend a greater chunk of their income on rent.
In 1985, when the average baby boomer turned 30, the median rent price was $359, while the median household income was $49,113 — a rent-to-income ratio of 9%.
For millennials of roughly the same age now, that ratio is 89% higher. The median rent price in 2020 was $894, while the median household income was $64,994 — a 17% rent-to-income ratio.
Millennials who have paid the median rent price every year since 2010 have spent about $129,420 on rent over the past decade.
|Generation||Median Income at 30 Years Old||Median Rent Price||Rent-to-Income Ratio|
Not only do millennials spend more of their income on rent, they also carry more monthly expenses such as student loan debt. Millennials have more student debt than any other generation, with the average person in their 30s owing about $30,000.
Large sums of debt combined with increasing rent prices that outpace wage gains mean millennials have less disposable income than previous generations to save for a down payment and home purchase.
Why Rent Prices Are Increasing
Soaring inflation, which jumped from 1.2% in 2020 to 7.5% in 2021, can account for some of the surge in rental rates. But since 2000, the median rent price has exceeded the inflation rate by 29%. During that time, the rental rate rose 90%, while inflation rose 70%.
A number of social and economic factors determine rent prices, including:
- A competitive housing market: The median home sale price rose nearly 17% to $346,900 in 2021, according to the National Association of Realtors. The expensive market has priced many would-be millennial home buyers out of the market. Millennials who can’t afford homes are choosing to rent and rent for longer.
- High demand, low supply: Demand for apartments is booming, but the number of available units is scarce, giving landlords leverage to raise rates. New apartment construction hit a five-year low in 2020, with 83% of multifamily developers reporting construction delays. The costs of building supplies, such as lumber and plywood, are also rising to near record highs.
- Rent relief programs: Some cities and states implemented rent freezes to help keep rates low for struggling families during the pandemic. Those measures have largely expired, and landlords are factoring nearly two years of increases into their current rates.
- Migration: With remote work options available, wealthy tenants are moving out of expensive hotspots to more affordable cities, where they have greater purchasing power for luxury apartments.
Rent Price Changes in the 50 Largest U.S. Metros: 2000 to 2022
Like the rest of the country, rent prices are outpacing income gains in the 50 most-populous metros in the U.S.
Prices tend to skew higher in urban areas, however, creating an even greater financial burden for city-dwellers. The 2022 median rent price in the 50 largest metros is $1,253 — 30% higher than the median U.S. rent price of $962.
From 2000-2022, rent prices more than doubled in half of all 50 cities studied, with rates tripling in San Antonio and Nashville.
|City||Rent 2000||Rent 2022||% Change|
|Las Vegas, NV||$702||$1,216||73.22%|
|Kansas City, MO||$574||$1,030||79.44%|
|Oklahoma City, OK||$469||$927||97.65%|
|Salt Lake City, UT||$647||$1,327||105.10%|
|Virginia Beach, VA||$580||$1,193||105.69%|
|New Orleans, LA||$521||$1,089||109.02%|
|San Jose, CA||$1,221||$2,868||134.89%|
|San Francisco, CA||$1,332||$3,198||140.09%|
|St. Louis, MO||$376||$947||151.86%|
|New York, NY||$920||$2,340||154.35%|
|Los Angeles, CA||$766||$2,044||166.84%|
|San Diego, CA||$805||$2,232||177.27%|
|San Antonio, TX||$383||$1,165||204.18%|
Rent Price Increases Have Exceeded Home Price Increases in Seven Metros Since 2000
From 2000 to 2022, median home prices grew 156%, while median rental rates rose 90% across the U.S. Although renting remains the cheaper option for most households nationwide, rent price increases actually surpassed home price gains in seven metros.
In those markets, rental rates climbed 152% on average since 2000, while home prices rose just 112%. The disparity was the greatest in Birmingham, Alabama, where the increase in rent prices was 92% greater than the change in home prices.
|City||Rent Price in 2000||Rent Price in 2022||% Change Rent||Home Value in 2000||Home Value in 2022||% Change Housing|
|New Orleans, LA||$521||$1,089||109.02%||$122,846||$255,960||108.36%|
|San Antonio, TX||$383||$1,165||204.18%||$130,821||$309,475||136.56%|
Rent-to-Income Ratios in the 50 Largest U.S. Metros: 2020
In the 50 largest metros, renters making the median salary of $64,994 and paying the median rental rate of $1,136 would spend approximately 21% of their gross monthly income on an apartment in 2020.
That’s 24% more than the median ratio of about 17% across all U.S. cities.
Rent is most affordable in St. Louis, Oklahoma City, Cincinnati, and San Antonio — the only four metros with a rent-to-income ratio lower than the national median.
|City||Median Rent 2020||Median Income 2020||Rent-to-Income Ratio|
|St. Louis, MO||$905||$90,790||11.96%|
|Oklahoma City, OK||$906||$81,951||13.27%|
|San Antonio, TX||$1,051||$77,102||16.36%|
|Kansas City, MO||$978||$69,240||16.95%|
|Virginia Beach, VA||$1,136||$68,454||19.91%|
|Las Vegas, NV||$1,080||$61,048||21.23%|
|Salt Lake City, UT||$1,176||$65,725||21.47%|
|New Orleans, LA||$1,078||$54,388||23.78%|
|New York, NY||$1,951||$81,951||28.57%|
|Los Angeles, CA||$1,956||$76,399||30.72%|
|San Jose, CA||$2,970||$110,837||32.16%|
|San Diego, CA||$2,037||$61,437||39.79%|
|San Francisco, CA||$3,339||$82,426||48.61%|
Rent-to-Income Ratios Exceed the Recommended 30% in Five Metros
Five of the 50 most-populous U.S. metros have a rent-to-income ratio that exceeds the recommended 30%. Not surprisingly, four of the five least affordable metros are in California.
In the five most expensive cities, the average rent-to-income ratio was 37% in 2020. By contrast, the average rent-to income ratio in the five most affordable cities was less than half that — 15%.
|City||Rent 2020||Income 2020||Rent-to-Income Ratio|
|San Francisco, CA||$3,339||$82,426||48%|
|San Diego, CA||$2,037||$61,437||40%|
|San Jose, CA||$2,970||$110,837||32%|
|Los Angeles, CA||$1,956||$76,399||31%|
A 1-Bedroom Apartment Costs 253% More in the Most Expensive City Than in the Least Expensive City
St. Louis is the most affordable place to rent an apartment of any size:
- A one-bedroom apartment costs $745 a month — about 10% of gross monthly income.
- A two-bedroom apartment costs $947 a month — about 13% of gross monthly income.
- A three-bedroom apartment costs $1,230 a month — about 16% of gross monthly income.
Predictably, the cities with the least affordable renting options are California. The rent-to-income ratio for one- and two-bedroom apartments is highest in San Francisco:
- The monthly rate for a one-bedroom unit is $2,631 — 38% of gross monthly income.
- The monthly rate for a two-bedroom unit is $3,198 — 47% of gross monthly income.
Renters pay the most for a three-bedroom apartment in San Diego, where the $3,099 per month rate eats up 61% of gross monthly income.
|Unit Size||Median Price in Least Expensive City||Median Price in Most Expensive City||% Difference|
Historical rent prices and rent prices by metro were retrieved from the U.S. Department of Housing and Urban Development’s 40th percentile Fair Market Rent calculations, stretching back as far as 1985. This provides a comprehensive look at changes in rent prices across time. Fair Market Rents, as defined in 24 CFR 888.113, are estimates of 40th percentile gross rents for standard quality units within a metropolitan area or non-metropolitan county. All data are calculated as medians for each year and each metro.
For a measure of historical nationwide income and income by metro, we used median household income provided by the U.S. Census Bureau’s American Community Survey (ACS) 5-Year Estimates. For median income prior to 2010, we relied on historical real median income trends from the St. Louis Federal Reserve. For data on housing vacancies, renter occupancies, and owner occupancies, we also used the Census’ ACS 2020 5-Year Estimates. When comparing rent prices to income, all comparisons were made from 2020 data, the most recent data for median incomes.
For an overall historical measure of inflation, we used the Consumer Price Index for All Urban Consumers: All Items, which measures the average monthly change in the price of goods and services paid by urban consumers between any two time periods. Consumer Price Index data is available through the Federal Reserve Bank of St. Louis.
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How much should I spend on rent?
Financial experts advise spending no more than 30% of your gross monthly income on housing. Learn more.
How much has the rent-to-income ratio increased?
The rent-to-income ratio in the U.S. is nearly 17% — almost double the 9% ratio from 1985. Learn more.
How much has rent increased?
From 1985 to 2020, the national median rent price rose from $359 to $894 — a 149% increase. In the same time frame, overall income grew just 35% — from $48,113 to $64,994. Learn more.
What city has the highest rent-to-income ratio?
The rent-to-income ratio exceeds the recommended 30% in five of the top 50 most-populous U.S. metros. The most expensive city is San Francisco, where rent costs $3,339 — about 48% of gross monthly income. Learn more.
What city has the lowest rent-to-income ratio?
With a rent-to-income ratio of about 12%, St. Louis is the most affordable city, followed by Oklahoma City (13%), Cincinnati (16%), and San Antonio (16%). Learn more.
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