Understanding the Rental Market: The U.S. Cities With the Most and Least Available Rentals for Average Income Earners

By the Mercury Team

The American dream of finding a comfortable place to call home is becoming increasingly challenging for many renters. According to the U.S. Bureau of Labor Statistics, consumer prices for rent of primary residences rose 8.6% from January 2022 to January 2023. Over the same period, average hourly earnings increased by 5.1%. These statistics mean that rental costs have outpaced wage growth, making it more difficult for several people to afford housing.

This predicament raises a critical question for many Americans: If you earned the average salary in 60 of America’s largest cities, how many rental options would be available to you? This blog delves into the heart of the U.S. rental market, exploring the cities where affordability is still within reach and highlighting those where the search for a reasonable rental feels like an uphill battle.

Key Findings

• Across 60 cities in the study, average-income individuals have access to 24% of rentals.
• Average earners in Boston may face challenges in securing affordable rentals, as less than 1% of the city’s rental options are accessible to individuals earning $80,810. San Diego and Miami also ranked among the bottom three in terms of availability for average-income earners.
• On the contrary, Detroit stands out with a substantial number of rentals for average-income earners, with over 72% of the market offering affordability for those making $62,000, the average salary.
• Four cities in California ranked among the lowest 10 cities in terms of available rentals for individuals with average incomes.
• Perhaps unsurprisingly, 8 of the top 15 cities with the most available rentals for average-income earners were located in the Midwest.

The 5 U.S. Cities With the Most Available Rentals for Average Income Earners

1. Detroit, MI

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Average Annual Salary: $62,000
Net Monthly Income: $4,431
Maximum Amount to Spend on Rent: $1,329
Available Rentals Within Rent Cost Range: 1251

Detroit has topped the list of cities with the most available rentals for average-income earners. With an average annual salary of $62,000 and a net monthly income of $4,431, residents can comfortably afford to pay up to $1,329 on monthly rent. This budget provides a wide range of options, with 1,251 available rentals within this cost range out of over 1,700 rentals on the market.

Detroit’s strong automotive and tech industries have contributed to a steady average salary, while the city’s ongoing revitalization efforts have created many affordable housing options. This balance of income and affordability makes Detroit a standout city for renters. The city’s rich cultural history, vibrant arts scene, and renowned music heritage only add to its appeal. Detroit’s ranking is a testament to its resilience and the opportunities it offers for a comfortable lifestyle with a manageable cost of living.

2. Milwaukee, WI

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Average Annual Salary: $59,320
Net Monthly Income: $4,277
Maximum Amount to Spend on Rent: $1,283
Available Rentals Within Rent Cost Range: 621

Milwaukee comes in second on the list of cities with the most available rentals for average-income earners. With an average annual salary of $59,320 and a net monthly income of $4,277, Milwaukee residents can allocate up to $1,283 each month for rent. This budget allows for a choice among 621 available rentals within this price range out of over 1,000 rentals on the 2024 market.

Milwaukee is a great place to find affordable rentals because it has a balanced economy and a housing market that caters to different incomes. It’s a city that combines urban living with a small-town feel, boasting a lively cultural scene, plenty of green spaces, and a strong sense of community. Milwaukee’s sustainable development and improved public transportation also make it a desirable place for renters seeking both affordability and improved quality of life.

3. Indianapolis, IN

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Average Annual Salary: $57,740
Net Monthly Income: $4,812
Maximum Amount to Spend on Rent: $1,444
Available Rentals Within Rent Cost Range: 959

Indianapolis is a prime destination for average-income earners looking for affordable rental options, with an average annual salary of $57,740 translating into a net monthly income of $4,812. This income level allows renters to spend up to $1,444 on housing, leading to a selection of 959 out of nearly 1,600 available rentals within this budget.

Significant contributors to this affordability may be the city’s diverse economy, which includes industries such as healthcare, education, and finance, which maintain steady average salaries. Additionally, Indianapolis’ location in the Midwest region correlates with the trend of more affordable living costs, as seen in Detroit and Milwaukee.

4. Memphis, TN

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Average Annual Salary: $52,660
Net Monthly Income: $4,008
Maximum Amount to Spend on Rent: $1,203
Available Rentals Within Rent Cost Range: 971

Memphis stands out as a city where average-income earners can find many affordable rental options. With an average annual salary of $52,660 and a net monthly income of $4,008, residents of Memphis can afford to spend up to $1,203 on rent each month. This budget allows for a choice among 971 available rentals within this cost range out of nearly 2,000 rentals on the market.

Memphis’s affordability may be primarily due to its diverse economy, which spans sectors like healthcare, transportation, and music. These sectors help to ensure steady average salaries while the cost of living remains relatively low compared to many other U.S. cities. Memphis’ rich music heritage, from blues to rock and roll, vibrant arts scene, and legendary barbecue cuisine add to the city’s appeal.

5. Minneapolis, MN

Source photo: https://www.shutterstock.com/image-photo/downtown-minneapolis-514464127

Average Annual Salary: $67,060
Net Monthly Income: $4,689
Maximum Amount to Spend on Rent: $1,407
Available Rentals Within Rent Cost Range: 713

Minneapolis distinguishes itself as a city where average-income earners have considerable access to affordable rental options, thanks in part to an average annual salary of $67,060. This salary translates into a net monthly income of $4,689, allowing residents to allocate up to $1,407 towards rent. This level of financial flexibility results in an availability of 713 rentals within this price range.

The affordability in Minneapolis can be attributed to its robust economy, which is anchored by sectors such as healthcare, manufacturing, and finance. These industries provide steady average salaries, while the cost of living remains relatively reasonable compared to other major U.S. cities.

The 5 U.S. Cities With the Least Available Rentals for Average Income Earners

1. Boston, MA

Source photo: https://www.shutterstock.com/image-photo/boston-cityscape-sunny-day-view-harbor-545879812

Average Annual Salary: $80,810
Net Monthly Income: $5,537
Maximum Amount to Spend on Rent: $1,661
Available Rentals Within Rent Cost Range: 10

Boston presents a challenging landscape for average-income earners searching for affordable rental options despite boasting a relatively high average annual salary of $80,810. This salary translates to a net monthly income of $5,537, which renters could afford up to $1,661 on housing expenses. However, the stark reality is a severe scarcity of available rentals within this budget, with only 10 properties fitting the criteria out of over 7,500 rentals on the 2024 market.

Several factors may contribute to Boston’s low ranking in affordable rentals. The city’s rich historic nature and status as a major educational and technological hub have led to a high demand for housing, pushing rental prices upward. Boston’s compact geography further exacerbates the issue, limiting the potential for new, affordable housing developments. Additionally, the city’s numerous colleges and universities create a competitive rental market, particularly for affordable units, as students and young professionals vie for the same living spaces.

2. San Diego, CA

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Average Annual Salary: $71,080
Net Monthly Income: $4,960
Maximum Amount to Spend on Rent: $1,488
Available Rentals Within Rent Cost Range: 19

San Diego, known for its stunning beaches, favorable climate, and vibrant lifestyle, faces a significant challenge in providing affordable rental options for average-income earners. Despite an average annual salary of $71,080, leading to a net monthly income of approximately $4,960, residents are constrained by a rental market that offers a mere 19 out of 3,600 available rentals.

The scarcity of affordable rentals in San Diego can be traced back to its economy, which spans sectors such as healthcare, defense, tourism, and international trade. While these industries contribute to the city’s decent average salaries, they also drive up the cost of living, especially housing costs.

3. Miami, FL

Source photo: https://www.shutterstock.com/image-photo/south-beach-miami-florida-469708088

Average Annual Salary: $58,980
Net Monthly Income: $4,436
Maximum Amount to Spend on Rent: $1,331
Available Rentals Within Rent Cost Range: 41

With its sun-drenched beaches, vibrant nightlife, and rich cultural tapestry, Miami is a sought-after destination for many. However, it also ranks as a city with limited affordable rental options for average-income earners. An average annual salary of $58,980 in Miami leads to a net monthly income of $4,436, allowing residents to allocate a maximum of $1,331 in rent. However, with only 41 available rentals within this cost range, finding affordable housing becomes a significant challenge.

The lack of affordable rentals in Miami can be attributed to several factors. The city’s appeal as a global tourism and entertainment hub has driven up demand for housing, while supply remains constrained by geographical limitations. Additionally, Miami’s population growth, fueled by both domestic migration and international immigration, exacerbates competition for affordable rentals, making it increasingly difficult for average-income earners to find suitable housing.

4. Riverside, CA

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Average Annual Salary: $58,160
Net Monthly Income: $4,212
Maximum Amount to Spend on Rent: $1,264
Available Rentals Within Rent Cost Range: 6

Riverside is nestled in the sprawling Southern California landscape, offering a unique blend of suburban charm, historical richness, and access to the economic opportunities of the Greater Los Angeles area. However, it occupies the fourth spot on the list of cities with the least available rentals for average-income earners. Riverside residents can allocate a maximum of $1,264 for rent each month, with an average annual salary of $58,160 and a net monthly income of $4,212. However, the city has only six available rentals within this price range, making the search for affordable housing incredibly challenging.

This lack of affordable housing can be attributed to Riverside’s proximity to Los Angeles, which inflates demand and rental prices. Additionally, Riverside’s housing market is further strained by land use regulations, development costs, and a focus on single-family homes, which can limit the construction of new, affordable rental units.

5. New York City, NY

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Average Annual Salary: $78,560
Net Monthly Income: $5,383
Maximum Amount to Spend on Rent: $1,615
Available Rentals Within Rent Cost Range: 280

New York City rounds out the top five cities with the least available rentals for average-income earners. New Yorkers can afford to spend up to $1,615 on rent each month, with an average annual salary of $78,560 and a net monthly income of $5,383. But with only 280 available rentals within this price range in a city of over 8.3 million people, the hunt for affordable housing becomes difficult.

This scarcity is likely due to New York City’s global allure, which drives a high demand for housing across all boroughs, significantly outstripping supply. The city’s real estate market is also one of the most competitive in the world, with luxury developments and high-end condos often taking precedence over affordable housing units. Additionally, the limited availability of space in this densely populated metropolis restricts new construction, especially for affordable housing projects.

Closing Thoughts

In examining the U.S. rental market, it’s clear that the availability of affordable rentals varies widely across cities. While places like Detroit and Milwaukee offer many options within an average income earner’s budget, others like Boston and San Diego have a scarcity of affordable housing.

If you find yourself in a city with limited rental availability, you must explore alternative solutions to ease your mind about the high cost of rent. One solution is Mercury Insurance, where we offer affordable renters insurance without compromising quality.

Renters insurance can provide peace of mind by protecting your belongings in case of unforeseen events such as theft, fire, or natural disasters. With Mercury’s comprehensive coverage options, you can rest assured that your personal belongings are safeguarded, even in areas where rental prices may be higher.

Methodology

We compiled Bureau of Labor Statistics (BLS) data to find the median annual salary in 60 of the most populous U.S. cities. Then, we calculated the average annual net income in each city according to federal and state taxes. After that, we divided it into 12 months of net income. Since the general rule of thumb is to spend 30% of monthly income on rent, we divided the net monthly income by .3 to find the maximum cost of rent you should spend in each city. Utilities were not included in this calculation. Then, we used Zillow to find the number of total rentals in each city versus the number of rentals equal to or less than the maximum monthly rent according to each city’s average salary. The rentals were confined to city limits. All data was collected in January 2024.

Full Data