The Windy City is the most affordable rental housing market in the United States, according to a new report by online real estate and management firm HomeUnion. What’s the most expensive rental market? We’ll give you a hint: it’s in California.
HomeUnion’s report breaks down the top 10 most and least expensive U.S. rental markets, spotlighting the annual rental for a single-family rental home, the average annual income, and the rent-to-income ratio. Chicago tops the list as the only American metro where typical renters spend less than 20 percent of their annual income on housing. HomeUnion reports an average annual SFR rent in Chicago as $19,956, against an average annual income of $102,180. That works out to a rent-to-income ratio of 19.5 percent.
“With its low cost of living, relatively large housing inventory levels, and high affordability, Chicago is an excellent market for residents entering the renting pool," said Steve Hovland, Director of Research for HomeUnion.
The second metro on the list is Charlotte, North Carolina, with an average SFR rent of $15,792. “About one-quarter of the average income of a typical Charlotte resident goes to rental housing, making it appealing to millennials," Hovland said.
The rest of the top 10 most affordable single-family rental markets include Minneapolis, Minnesota; Detroit, Michigan; Atlanta, Georgia; St. Louis, Missouri; Raleigh, North Carolina; Houston, Texas; Oklahoma City, Oklahoma; and Tampa, Florida.
On the other end of the spectrum, Oakland, California tops the list of most expensive SFR markets, with an average annual SFR rent of $37,524, an average annual income of $73,284, and a rent-to-income ratio of 51.2 percent.
Rounding out the rest of the most expensive top 10 metros are Cincinnati, Ohio; Salt Lake City, Utah; Orange County, California; Portland, Oregon; San Francisco, California; Washington, D.C.; Denver, Colorado; Cleveland, Ohio; and San Diego, California.
Hovland explained, "Low affordability negatively impacts all renters in the Bay Area, Denver, Southern California, and Washington, D.C., because of strong local job market conditions, intense demand for rental properties, and high mortgage costs for owner-occupied housing.” He added that "A significant number of potential young renters are migrating out of Ohio to Chicago or booming western metros such as Denver, the Bay Area, and Los Angeles, leaving mostly low-wage earners to occupy rentals.”
For more insights into the state of the single-family rental market, be sure to register for the 2018 Single-Family Rental Summit, scheduled for March 19-21 at the Renaissance Nashville Hotel in Nashville, Tennessee. The event will feature top subject matter experts and skilled SFR practitioners leading discussion panels and training sessions that will answer questions and offer viable solutions related to property acquisition and management, financing, strategies for small, mid-cap, and large investors, and new developments related to technology and professional services. You can find out all the details by clicking here.