The fact that the gross rent share of income did not rise nationally and in most states despite significant increases in rental costs could be due to higher renters’ incomes or to an increase in higher-income households joining the population of renters.
Source: U.S. Census Bureau
September 12, 2024
Author: Jacob Fabina
The real median gross cost of renting — rent plus the average monthly cost of utilities and fuels adjusted for inflation — grew faster annually (3.8%) than real median home values (1.8%) in 2023 for the first time in 10 years, according to the 2023 American Community Survey (ACS) released today.
This marked the largest annual real increase in rental costs since at least 2011.
Rent Costs by State
Most states saw no significant change in the ratio of gross rent to renters’ income (Figure 1).
Six states saw a decline in the share of renters’ incomes going to rent: Illinois, Kansas, Minnesota, New Mexico, New York and West Virginia.
Even as the rent share of income declined, rent increased by 1.6% in Illinois and 2.1% in Kansas (these growth rates were not significantly different), and by 9.1% in New Mexico.
In contrast, three states experienced a significant increase in the share of renters’ incomes going to rent in 2023: Arizona, Florida and Georgia.
Rents increased 6.5% in Arizona, 8.2% in Florida, and 6.0% in Georgia (Arizona rent growth was not significantly different from growth in Florida or Georgia).
Incomes Keeping Up With Rent Increases
The fact that the gross rent share of income did not rise nationally and in most states despite significant increases in rental costs could be due to higher renters’ incomes or to an increase in higher-income households joining the population of renters.
From 2022 to 2023, the number of renters grew, while median household income was not significantly different. However, this measure includes the income growth of nonrenters, and the income growth of renters and nonrenters may have differed.
The number of renter-occupied housing units increased by 0.9% in 2023. While changes to the cost of owning a home, such as higher interest rates or home values, could push households away from home ownership and toward renting, the share of households renting remained constant at 34.8% between 2022 and 2023.
Jacob Fabina is an economist in the U.S. Census Bureau’s Social, Economic, and Housing Statistics Division.
