Yahoo Finance 5 States Where Rent Is Still Affordable
A good man. Good help. A needle in a haystack. Rent for less than $1,000 a month.
These days, they’re all hard to find.
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The median cost for rent in the U.S. hit $1,383 a month in September, according to the latest data from Apartment List. That’s a 7.5% jump from a year ago and a 23.4% spike since the pandemic hit in March 2020. Just four states — North Dakota, Iowa, Kentucky and South Dakota — had median rents of under $1,000. In GOBankingRates’ September rent survey, 18.5% of renters said they needed to move because of increased rent costs.
So where in the U.S. is rent most affordable? Rather than just ranking the states by cheapest median rent, let’s divide those rents by each state’s median renter income, provided by the Census Bureau (numbers from 2021 are the most recent.)
Do that, and you get a different list.
“‘Affordability’ is more accurately described as the relationship between rents and incomes than just rents alone,” said Rob Warnock, senior research associate for Apartment List. “The common rule of thumb is that households shouldn’t spend more than 30% of their income on rent; and, while this metric isn’t perfect, it does make for a better comparison across states.”
For example, Mississippi has the 10th-cheapest median rent in the nation at $1,067. But with a median renter income of just $29,577, the Magnolia State has a rent-to-income ratio of 43.3% — the sixth least affordable in the U.S.
Californians pay a median of nearly $2,000 a month for rent, second only to Hawaii. But rent is relatively affordable in California, due to a high median renter income of nearly $61,000. The state’s rent-to-income ratio is only 39.3% — still high but closer to the middle of the pack.
Based on that approach, here are five states where rent is relatively affordable, plus five states where your average renter really has to dig deep every month. (One caveat: Apartment List’s latest report didn’t have enough data to include Maine, Vermont or West Virginia.)
Relatively Affordable: North Dakota
Median monthly rent: $847
Rent-to-income ratio: 25.5%
The Peace Garden State has the nation’s lowest median monthly rent and a median renter’s income of $39,868. That translates to a rent-to-income ratio a full four percentage points lower than any other state in the survey.
There’s more good news for North Dakotan renters: Rents are up only 0.5% since the start of the pandemic. No other state comes close to that low of an increase. The District of Columbia is next on the list at 3.8%. For added perspective, median rents in Idaho are up 41.9% over the same period.
A two-bedroom in Cass County, where Fargo is located, has a median cost of just $999 a month.
Bring Your Wallet: Connecticut
Median monthly rent: $1,608
Rent-to-income ratio: 43.4%
Connecticut is one of several states in our list that blows past the “Don’t spend more than 30% of your income on housing” financial guideline.
The state’s median monthly rent of $1,608 and median renter income of $44,483 pencil out to a rent-to-income ratio of 43.4%. In Fairfield County — home to Bridgeport and Stamford — renters shell out $2,068 a month at the median.
Relatively Affordable: Minnesota
Median monthly rent: $1,103
Rent-to-income ratio: 29.6%
Minnesota’s median monthly rent is just the 18th cheapest, according to the Apartment List study. But the state’s strong median renter income of $44,761 translates into the second-lowest rent-to-income ratio in the nation. Median rents are up only 3.1% since a year ago and just 5.4% since March 2020.
Monthly rent in Hennepin County, which includes Minneapolis, came in at $1,277 in the Apartment List study.
Bring Your Wallet: New York
Median monthly rent: $1,781
Rent-to-income ratio: 43.6%
Notoriously expensive New York has the nation’s fourth-highest rent-to-income ratio. That’s based on a median renter income of $49,002.
It depends on which part of the state you’re in, of course. The median rent for two bedrooms in New York County is nearly $3,000. Upstate in the capital city of Albany, you’ll pay about half of that.
Relatively Affordable: Iowa
Median monthly rent: $942
Rent-to-income ratio: 30%
Iowa has the nation’s second-cheapest median monthly rent and the third-lowest rent-to-income ratio. A one-bedroom in Des Moines will cost you $788, with a two-bedroom coming in at $982.
Bring Your Wallet: Rhode Island
Median monthly rent: $1,536
Rent-to-income ratio: 43.9%
The nation’s smallest state has seen a 33.1% increase in median rent since the beginning of the pandemic. Rhode Island renters have a median income of just over $42,000 and the third-highest rent-to-income ratio in the U.S.
Median rent in Providence County is $1,448 a month.
Relatively Affordable: South Dakota
Median monthly rent: $999
Rent-to-income ratio: 30%
Despite a 13.1% increase in median rental costs year-over-year, South Dakota still has the nation’s fourth-cheapest rent. In Sioux Falls, median rent is $1,085 a month for a two-bedroom and just $890 for a one-bedroom.
Bring Your Wallet: Hawaii
Median monthly rent: $2,343
Rent-to-income ratio: 45.4%
Hawaii’s cost of living is famously high, and the cost of rent certainly takes a big bite. The Aloha State has the nation’s highest median rent, topping the second-highest — California — by more than $350 a month.
The median rent in Honolulu County tops $2,400 a month.
Relatively Affordable: Nebraska
Median monthly rent: $1,038
Rent-to-income ratio: 30.9%
Sub-$1,000 rents are getting harder to come by in Nebraska, where the median rent is up 8.2% from this time last year and up 19.4% since March 2020. Still, the state’s median renter income of $40,330 translates into a relatively reasonable rent-to-income ratio of just under 31%.
In the capital city of Lincoln, the median cost for a two-bedroom apartment is $1,050 a month, compared to $856 for a one-bedroom.
Bring Your Wallet: Florida
Median monthly rent: $1,727
Rent-to-income ratio: 46.3%
Median rents in the Sunshine State have spiked 37.1% since the beginning of the pandemic, one of the steepest increases in the nation. Median-income renters are paying nearly half of that income just for rent.
The median cost to rent in Miami-Dade County came in at $2,042 in the Apartment List study. Things are cheaper up north in cities like Gainesville ($1,155), Jacksonville ($1,487) and Tallahassee ($1,410).
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This article originally appeared on GOBankingRates.com: 5 States Where Rent Is Still Affordable
