Our brokers work with renters all the time—most of those renters have seen their costs go up to the point where it makes economic sense to buy rather than rent. Is that happening only in JMAC’s footprint, or all over the nation?
Axiometrics Analytics found America’s most affordable and least affordable rent markets by analyzing 28 metros to better understand where rents are more affordable and may be most affordable in the future. The analysis reviewed rent to income ratios, looking at 30 percent or more of income spent on rent as unaffordable with Little Rock, Salt Lake City, Las Vegas and Indianapolis ranked as some of the most affordable cities to live in.
JMAC is not in New York, but Los Angeles, Miami, San Francisco, and Oakland all ranked as the cities that are least affordable. Interestingly enough, New York was the least affordable city in 2001 where rent averaged $2,300 while Little Rock, Arkansas was one of the more affordable places to live in 2001 with rent averaging $617 and a rent-to-income ratio of 17.4 percent. The national average, on the other hand, reached 27.7 percent.
Over the past 20 years, the best place to rent has been Indianapolis where in 2007 monthly rent was $701, equating to 15.2 percent of income going towards rent. On the flip side, New Yorkers had a rent-to-household income ratio of 64 percent during this same time period, and the national average was 24.9 percent. New York will remain the least affordable place to live as the expected amount of income that goes towards rent is 50.5 percent, and Los Angeles is expected to become less affordable as rent starts inching towards 48.6 percent of households’ incomes. Little Rock will remain as one of the more affordable places to live in the near future – but then again, one would have to live there to enjoy the savings!