With rent prices rising faster than wages in recent years, many Americans are putting a bigger chunk of their paycheck toward living expenses. These percentages vary from market to market, understandably, so AppFolio, an online property management company, published a report Wednesday detailing the affordability of 20 of the most popular cities in the country.
According to the report, by 2025, almost 16 million people will spend more than 50% of their income on housing. For now, there are just two cities where that’s the case.
Currently, New York City holds the distinction of least affordable city, with its renters spending an average of 58% of their paychecks on housing. Next on the list of least affordable are Miami (54% of renters’ paychecks go toward housing), Los Angeles (47%), and San Francisco (46%), according to the study.
Also of note about San Francisco, which is synonymous with expensive housing options, rents are actually coming down as slower job growth reduces demand, notes AppFolio.
Las Vegas was deemed most affordable, with residents there spending only 20% of their monthly income on housing, followed by Indianapolis (21%); Phoenix (22%); Austin, Texas (23%); and Atlanta (23%).
AppFolio looked at rent growth, average apartment rent, and average monthly household income when compiling the report. Before that, it commissioned rent data from Axiometrics, which provided the effective-rent growth and average monthly rent figures. AppFolio then made the affordability calculations based on percentage of average monthly household income put toward the average monthly apartment rent.
