Seattle renters need biggest income boost to keep up with rising rents

SEATTLE, April 7, 2017 /PRNewswire/ — Renters in Seattle, Los Angeles, and Boston need the biggest income increases in 2017 to keep up with rising rents, according to a new Zillow analysisi. In each of these metros, renters need their annual incomes to be at least $1,000 higher next year to have the same amount of money left over after paying rent.

Nationally, annual incomes would need to rise just $168 for renters to keep up with rising rents in the next year alone – an increase that comes on top of nearly five years of rising rents putting a dent in paychecks across the country.

These income increases will only maintain the current amount of left over cash after paying rent. In several major metros, the share of income needed to pay rent already surpasses the general rule of not spending more than 30 percent of income on housing. In nearly all large markets, the median rent requires a larger share of income than it did before the housing bubble and bust.

Housing affordability is still a significant issue for renters, who have experienced rising rents for years. In some markets, the median rent requires more than 40 percent of the typical household income. However, rent appreciation is slowing, and rents are predicted to rise just 1 percent over the next year.

“For a long time now, renters have faced an affordability crisis when it comes to housing, and renters in some hot markets will still need significant raises just to keep up with rising rents,” said Zillow Chief Economist Dr. Svenja Gudell. “Incomes have a ways to go to bring rental affordability closer to historical levels, but recent gains are being met with slowing rent appreciation, a welcome sign for renters.”

Top Five Markets Needing the Biggest Annual Income Increase to Keep Up with Rising Rents

Metro

Annual Income Increase

1.

Seattle

$1,248

2.

Los Angeles

$1,152

3.

Boston

$1,140

4.

Sacramento, Calif.

$792

5.

Orlando, Fla.

$672

Not all rental markets are expected to see as strong of rent appreciation. Renters in the Bay Area, Chicago, and Houston, for example, do not need their incomes to grow to have the same amount of money left over after paying rent. Income growth in these markets will provide some much needed relief for renters in terms of housing affordability.

Metropolitan Area

Zillow Rent
Index
(February
2017)

Forecasted
Zillow Rent Index
(February 2018)

Annual Income
Increase Needed
to Maintain
Current
Disposable
Income After
Paying Rent

Annual Income
Percent Change
Needed to
Maintain Current
Disposable
Income After
Paying Rent

United States

$1,406

$1,420

$168

0.3%

New York/Northern New Jersey

$2,391

$2,382

$0

0.0%

Los Angeles-Long Beach-Anaheim, CA

$2,642

$2,738

$1,152

2.0%

Chicago, IL

$1,619

$1,603

$0

0.0%

Dallas-Fort Worth, TX

$1,565

$1,609

$528

0.9%

Philadelphia, PA

$1,568

$1,593

$300

0.5%

Houston, TX

$1,547

$1,540

$0

0.0%

Washington, DC

$2,114

$2,140

$312

0.5%

Miami-Fort Lauderdale, FL

$1,854

$1,879

$300

0.6%

Atlanta, GA

$1,335

$1,334

$0

0.0%

Boston, MA

$2,342

$2,437

$1,140

1.7%

San Francisco, CA

$3,354

$3,240

$0

0.0%

Detroit, MI

$1,175

$1,184

$108

0.2%

Riverside, CA

$1,754

$1,792

$456

1.1%

Phoenix, AZ

$1,309

$1,346

$444

0.9%

Seattle, WA

$2,100

$2,204

$1,248

1.8%

Minneapolis-St Paul, MN

$1,566

$1,606

$480

0.8%

San Diego, CA

$2,452

$2,506

$648

1.2%

St. Louis, MO

$1,132

$1,118

$0

0.0%

Tampa, FL

$1,347

$1,373

$312

0.7%

Baltimore, MD

$1,720

$1,705

$0

0.0%

Denver, CO

$1,998

$2,043

$540

0.9%

Pittsburgh, PA

$1,068

$1,049

$0

0.0%

Portland, OR

$1,804

$1,859

$660

1.2%

Charlotte, NC

$1,248

$1,280

$384

0.7%

Sacramento, CA

$1,709

$1,775

$792

1.5%

San Antonio, TX

$1,323

$1,330

$84

0.2%

Orlando, FL

$1,396

$1,452

$672

1.6%

Cincinnati, OH

$1,254

$1,299

$540

1.1%

Cleveland, OH

$1,141

$1,136

$0

0.0%

Kansas City, MO

$1,251

$1,280

$348

0.7%

Las Vegas, NV

$1,247

$1,258

$132

0.3%

Columbus, OH

$1,293

$1,315

$264

0.5%

Indianapolis, IN

$1,184

$1,161

$0

0.0%

San Jose, CA

$3,449

$3,421

$0

0.0%

Austin, TX

$1,694

$1,706

$144

0.3%

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