HOUSTON– (By Dale King, Realty News Report) – The U.S. apartment rental market got a boost in a couple of significant ways during the latter part of 2024, and three Texas metros contributed to that progressive take, says a newly released analysis from Seattle-based real estate brokerage Redfin.
The report says folks looking to lease a property don’t need to take home as much annual income as in the past to cover the median asking rent for a U.S. apartment, now estimated at $1,592 per month. The take-home sum of $63,680 is the lowest amount needed to pay the annual lease total since March 2022.
At the same time, leaseholders are earning more money. The estimated median income for a renter in 2024 was $54,752, up 5.3 percent from 2023 ($52,019) and 35.2 percent more than the period before the pandemic in 2019 ($40,505).
Emphasizing improving affordability overall, Redfin says renters in 15 of the 44 metros it just analyzed earned more than is needed to afford the median annual rent compared to only seven metropolitan areas in December 2023.
The top three metros on the list of 44 examined by Redfin are Austin, Houston and Dallas – areas where those who lease their homes don’t have to exhaust their income – or even come close – to cover rent payments.
Renters in Austin earned a median salary of $69,781. That’s 25.1 percent (or $14,021) more than they need to pay for the typical apartment — the biggest gap among all the major metros in the Redfin report.
Next came Houston. Median asking rent was listed at $1,239 a month. The yearly income required to afford median asking rent was $49,560. Estimated median renter income was recorded as $58,287. The difference between required and estimated income was 17.6 percent to the good.
Dallas followed. The difference between necessary and estimated median renter income was 10.3 percent more than necessary.
Data from Apartment List Inc. sheds additional light on Houston’s part in renter affordability. In essence, lease prices in the region have remained flat or dropped a tad, and the cost of renting space is considered moderate.
Rents in Houston fell 0.3 percent in January compared to a 0.2 percent decrease nationwide. Year-over-year rent growth in Houston now stands at -0.4 percent, better just a bit from -0.7 percent a year ago. This ranks the Space City 70th among the largest 100 cities nationally in the growth category.
Today, the median monthly rent in Houston is $1,135 for a one-bedroom unit and $1,345 for a two-bedroom unit. The cost of leasing in Houston is 6.1 percent lower than the national average, says Apartment List.
According to Redfin’s report, the $63,680 asking rent for a U.S. apartment is down 0.4 percent from a year ago and a drop of 6.4 percent from August 2022 when the median asking rent hit an all-time high of $1,700. Back then, a renter would have had to earn $68,000 to afford the typical apartment — nearly $5,000 more than today.
At the other end of the affordability spectrum, renters in Providence earned a median salary of $50,408 — 41.3 percent ($35,392) less than what is needed to cover the rent on a median priced apartment. That was the biggest shortfall among the major metros analyzed, says the report.
Next came areas where rents are historically expensive and demand is consistently high: Miami (39.8 percent less) followed by New York (36.7 percent less), Los Angeles (34 percent less) and Boston (31.3 percent less), rounding out the five least affordable metros for renters.
Data in Redfin’s report is from December, prior to the Los Angeles wildfires. Redfin is tracking reports that rents have started rising across Los Angeles as displaced residents look for new homes.
On a positive note, Redfin said the gap between how much renters earn and the income they need to keep rent affordable is shrinking, with last month’s difference being the smallest in the five years Redfin has tracked the two metrics.
“Rental affordability will continue improving this year, as wages grow and rents remain flat, thanks to the recent boom in apartment construction,” said Redfin Senior Economist Sheharyar Bokhari.
As to the “affordability gap between renting and buying, [it] is likely to widen further in 2025 as home prices rise and mortgage rates remain high.” Bokhari said. “That means potential homebuyers — especially from younger generations — may decide to continue renting longer as it’s the only affordable option.”
Jan. 29, 2025 Realty News Report Copyright 2025
Image: CALpixRealty News Report, Copyright 2025
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