The City Where People Cannot Afford to Rent a Place to Live
There are several rules of thumb about how much people should pay to rent or buy a house or apartment. The number often mentioned is 30% of gross monthly income. People may want to factor in property taxes, insurance and utilities. Several things can alter this formula. Mortgage rates have been at historic lows for years (though that has changed recently). That makes many homes more affordable. Yet, people with mortgages (the interest rates of which can reset) may find that what they can afford today is different from what they can afford tomorrow.
For its Rental Requirements report, Admiral looked at rental rates across America’s largest cities. The insurer looked at the cost to rent compared to income, and rent costs per month for single people were used for the calculation. The source of the data were “popular online room rental sites in the US.” It is a limited and imperfect method. The metric used from this information compared average rental prices in each city and peoples’ average housing budget.
The city where this ratio was highest (which means it is where rents are least affordable) was San Francisco at 94.8%. The city has among the highest home prices in America at $1,560,000. That figure rose 6% in 2020. Based on the rapid rise in real estate prices nationwide, the price of homes in San Francisco likely rose even faster last year.
Buying homes or renting them has become a foot race between how much people’s wages are rising in proportion to the cost of real estate.
Places with high rates in proportion to income are not clustered in one place. Baton Rouge, Wichita and Philadelphia are high on the list as well.
These are the 10 cities with the least affordable rent:
- San Francisco (94.8% of income)
- San Antonio (90.5%)
- Baton Rouge (88.7%)
- Wichita (84.4%)
- Chula Vista (83.4%)
- Philadelphia (82.5%)
- Dallas (80.3%)
- Saint Paul (79.2%)
- Tucson (78.9%)
- Los Angeles (78.8%)
Click here to see which city has the most expensive houses in America.
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