While much attention has been given to the continuing pace of rent increases nationally, a new report by a real estate analytics company says that on average most “market-rate apartment renters” are spending less than a quarter of their income on their apartments.
The report, 2022 Market-Rate Apartment Affordability Report, issued by the Richardson, Texas-based RealPage, which provides both data analytics and software to the real estate industry, say that thus far in 2022 renters are spending an average of 23.2% of their incomes on where they live.
That figure, RealPage notes in a press release, is “up modestly from pre-pandemic norms, but still well below the traditional affordability ceiling of 33%.”
That more manageable rent-to-income ratio is partly attributable to an increase in median household income thus far this year. According to the report, that figure now stands at $75,000, a 15.4% increase in the last two years.
At the same time, the median monthly rent on new leases increased by 21.9% for a national average of $1,510. Those figures, says the report, “reversed a pattern of eight straight years of rent-to-income ratios inching downward.”
In a statement, Carl Whitaker, RealPage’s director of research and analysis, said, “Apartment renters are spending slightly more on rent than they did prior to the pandemic, but many could still get stretched as other expenses, particularly food and gas, climb at much faster rates.”
Despite the generally positive view on current market apartment rents, the report notes: “There’s a separate challenge that existed long before the pandemic and has only been exacerbated since then. That’s the lack of housing options for low-income households.”
“America’s housing shortage remains most severe at the lowest price points,” the report continues, adding: “Simply put: affordable housing supply has not kept pace with affordable housing demand in recent decades.”
By Garry Boulard
