Renters now need to earn more than $100,000 to comfortably afford rent in eight major metro areas, underscoring how wage growth hasn’t kept pace with the cost of living in recent years.
Since 2020, four new cities — Los Angeles, San Diego, Riverside, Calif., and Miami — have crossed the six-figure threshold for affording median rent, according to Zillow.
In Los Angeles, it now takes a salary of $119,000 to comfortably afford the city’s median rent of nearly $3,000. Miami is slightly cheaper and requires an income of $110,000. Affordable housing costs generally mean keeping rent below 30% of one’s income.
Read more: 12 popular types of houses for buyers and renters
The four cities join Boston, New York, San Francisco, and San Jose, Calif., as the most expensive places to rent in the US. In San Jose, home to many of the country’s largest technology companies, renters need to earn $137,000 to afford the median apartment. But incomes in the area are high and have largely managed to keep pace with rent increases. The median household in San Jose spends around 25% of its income on rent.
In contrast, New York and Miami are two of the least affordable cities when comparing wages to rental costs. In both cities, the average-earning renter would need to spend more than 40% of their income to afford the median-priced rental.
“Housing costs have surged since pre-pandemic, with rents growing quite a bit faster than wages,” Orphe Divounguy, senior economist at Zillow, said in a statement. “This often leaves little room for other expenses, making it particularly difficult for those hoping to save for a down payment on a future home.”
Learn more: How to save for a house in 7 easy steps
Worsening rental affordability isn’t just a problem in the country’s most expensive cities. On average, a household now needs to make $81,000 to afford the nationwide median rent of $2,094. That’s up more than 34% from April 2020, while wages have risen around 23% in the same period.
A handful of cities remain comparatively affordable for renters. In Buffalo, N.Y., Oklahoma City, and Louisville, Ky., the median renter spends 23% of their income or less on rent, making those cities affordable for households earning under $60,000 a year.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
Sign up for the Mind Your Money newsletter
Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more
Read the latest financial and business news from Yahoo Finance
