The cost of renting in the United States is decreasing in some areas faster than others, creating a varied landscape for those looking for a place to live. As Daryl Fairweather, Redfin’s chief economist, explains, the overall picture of rental affordability is improving due to several factors, one of which is an increase in supply.
“We’re seeing more apartments available because there was quite a bit of construction activity during the pandemic,” Fairweather explains. This surge in new rental options means landlords are having to lower their prices to stay competitive.
Additionally, renters are experiencing wage growth, which enhances their spending power. In 2024, the median income for renters rose to $54,752, marking an increase from $52,019 in 2023, and shooting up 35.2% from $40,505 in 2019, as noted in a recent Redfin report. Despite this, renters’ median income still trails by 14%, or about $8,928, below the level necessary to comfortably afford rent.
“The majority of renters continue to be burdened by rent costs,” points out Fairweather, meaning that they are dedicating more of their income to housing than is advisable. The Joint Center for Housing Studies at Harvard University categorizes renters as “cost burdened” when they allocate more than 30% of their income to cover rent and utilities.
While some parts of the U.S. enjoy greater rental market conditions due to an oversupply of new buildings, other regions face challenges with fewer building projects and, consequently, higher demand and prices. Regardless of whether you’re on the lookout for a new apartment or renewing your current lease, here’s a glimpse at the top 10 places where rent is plummeting and those where it’s climbing.
### Improving Affordability Amid Falling Rents
Top of the “most affordable metros” is Austin, Texas, where Redfin describes renters as typically earning more than what is necessary to afford a standard apartment. In Austin, the typical renter earns $69,781 each year, which surpasses the required $55,760 by 25.14%. Following Austin are Houston, Dallas, Salt Lake City, Raleigh, North Carolina, Denver, Phoenix, Washington, D.C., Baltimore, and Nashville.
In these cities, the increased building activities have tempered rents by bolstering supply to the extent that prices have become more moderate. Fairweather highlights another factor: the cooling demand for these areas, which were hot spots during the pandemic-induced remote work boom. Now, as many individuals return to physical office spaces, these places have seen a decline in migration influence.
So, it is the mix of new developments and reduced demand that has driven prices down, making them more manageable for renters, Fairweather notes.
### High Rents Due to ‘Lack of New Construction’
Conversely, other U.S. metropolitan areas endure high rent prices, where construction has lagged behind demand, leading to limited supply and elevated costs. “The issue is a shortage of new construction,” states Joel Berner, a senior economist at Realtor.com.
Topping Redfin’s list of least affordable areas is Providence, Rhode Island. The city’s proximity to Boston, considered very expensive, compounds the issue. Fairweather points out that Boston’s affluent workforce has spilled over into Providence, driving up demand and prices to levels that outpace local incomes. The insufficient housing supply exacerbates this issue.
Major cities like Los Angeles, Miami, New York, and San Diego remain some of the most expensive rental markets, drawn by limited housing stock combined with abundant job opportunities and vibrant urban lifestyles that attract higher earners, Fairweather mentions.
“As in economics, when supply is low, prices will consistently be high,” concludes Berner.
