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Bidenomics: Only 39% of Americans make enough money to afford rent

A Redfin report revealed that the typical household earns $11,400 less annually than the target to afford the cost of rent on their home.

House for rent(Pexels)

A report by Redfin revealed that only 39% of American renters earn enough money to pay rent for a median-priced apartment.

The study details that the typical U.S. household earns $11,400 less in income than the total needed to afford rent. According to the report's calculations:

"The typical U.S. renter household earns an estimated $54,712 per year. That’s 17.3% less—or $11,408 in dollar terms—than the $66,120 a renter must earn to afford monthly rent for the median-priced U.S. apartment ($1,653)."

Rent deemed affordable when it is less than 30% of income 

The report notes, "We consider an apartment affordable if a renter spends no more than 30% of their income on rent (which is the same as saying their annual income is at least 40 times their monthly rent)."

The amount of money renters must make to afford a median-priced apartment is at the highest level since October 2022 (up 0.8% year over year and 22.9% over May 2019).

Redfin senior economist Sheharyar Bokhari commented:

"Many U.S. renters are and will remain burdened by the cost of having a roof over their head, and unlike homeowners, they’re not building wealth through rising property values."

The worst places to rent

The most expensive cities to rent an apartment are New York and Miami. In these places, a "typical renter earns roughly 40% less than they need to afford the typical apartment."

The study points out that New York is the place where rent is the highest. This year, rent prices have increased by 9.2% over last year. Moreover, New York renters earns an average of $67,358 a year. That's 43.5% less than the $119,120 a renter needs to afford a median-priced apartment.

New York is followed by Miami (renters earn 42.2% less than what they need), followed by Boston (38.7%), Los Angeles (36.1%) and Riverside, Calif. (30.8%).