Despite being widely regarded as a nation of homeowners, the United States has a well-developed rental market. On the short term, renting is more affordable than buying a house, as it does not require a down payment. That makes it especially common among younger adults at the beginning of their career.
were under the age of 30 in 2022. Furthermore, renters have on average
: The household income of more than 50 percent of renters was below 50,000 U.S. dollars, compared to about 20 percent of homeowners with a mortgage. The U.S. has a growing stock of rental homes, with
How much does renting in different U.S. markets cost?
Renting is most common in dense urban areas with competitive real estate markets. In California, one of the states with the hottest housing markets,
about 30 percent of the population was renters. In the District of Colombia, this share was even higher at 39 percent. Finding an affordable apartment can be especially challenging in such markets with rents dramatically higher than the national average. In California, the median rent for a two-bedroom apartment cost almost
700 U.S. dollars above the national average in November 2023. Hawaii, New Jersey, and Massachusetts were other states with high rents. These states tend to have
higher average wages, but often this is
not enough for the rent of a two-bedroom apartment. In Massachusetts, renters would have to hold 1.4 full-time jobs on mean wage or 2.7 full-time jobs on minimum wage to afford such an apartment.
The future of the U.S. rental market
The U.S. rental market is poised to grow in the future as
homebuying remains unattainable for the average American due to the undersupply of the market, record-high prices, and interest rates. In 2023, some of the markets with t
he most demand for rental properties included Austin, Washington DC, and New York, and Orlando. In August that year, the rental market calmed after
two years of rapid increases in rental prices, when rents rose annually by up to 18 percent. Despite the slowdown and rental growth turning negative for the first time since the coronavirus pandemic, many states
continued to see rising rental prices.
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