--- title: Devoting 30% of Your Income to Rent Is Becoming the Norm in the U.S. description: Though the market is cooling, rent costs in the U.S. are still eating up nearly a third of median annual household earnings on average. authors: - name: Mary Ellen Cagnassola role: Reporter url: https://money.com/author/mary-ellen-cagnassola/ bio: Mary Ellen (M.E.) Cagnassola is a former Money reporter who specialized in U.S. rent and real estate, with a focus on market trends and affordability. education: Rutgers University, BA Journalism at_money_since: 2021 articles: 205 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes former_staff: true published: '2023-05-16T19:53:10.000Z' modified: '2024-01-10T14:49:27.000Z' section: Housing tags: - News word_count: 554 canonical: https://money.com/rent-30-percent-income-norm/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Couple discusses paying the rent in their apartment](https://img.money.com/2023/05/News-Paying-30-income-on-rent.jpg?crop=0px%2C76px%2C2880px%2C1620px&quality=85) Even as the U.S. [rental market’s](https://money.com/rent-prices-decline-march/) red-hot fever finally breaks, rent-to-income levels are still painfully high, according to [new data](https://cre.moodysanalytics.com/insights/market-insights/key-takeaways-from-the-1st-quarter-housing-affordability-update/). At the end of 2022, financial services firm Moody’s reported that for the first time in almost a quarter century of tracking, the average U.S. rent cracked 30% of the median household income — qualifying the typical renter as “rent-burdened.” While costs cooled slightly in the first quarter of this year, rents are still eating up nearly a third of median annual household earnings on average. According to Moody’s economists, it’s not looking like that will change anytime soon. For years, financial experts have recommended a rule of thumb that says people should spend no more than 30% of their gross income on rent. - But last year, the average cost to rent an apartment in the U.S. crossed a historic threshold, breaching 30% of the median household income. The milestone meant that, for the first time since Moody’s started tracking these rental costs in 1999, the U.S. technically became “rent-burdened” nationwide. - Now, American renters are slightly under the rent-burdened threshold at 29.6% as of the first quarter of 2023. - Renters probably won’t see any significant improvement in rent-to-income ratios for a while. Moody’s forecasts that rent growth will hover around 2% annually, so while costs will stay largely flat, renters are unlikely to see much relief. “As [wage growth](https://money.com/get-new-job-raise-outpace-inflation/) trails behind the [cost of shelter](https://money.com/rising-rent-home-costs-high-inflation/), Americans are feeling financially distressed,” Lu Chen and Mary Le, economists for Moody’s, said in a Tuesday [news release](https://www.moodysanalytics.com/about-us/press-releases/2023-5-16-moodys-analytics-ninty-one-percent-decline-us-metros). ## The most rent-burdened cities Though it may not be surprising to see notoriously expensive [cities](https://money.com/best-places-to-live/) like New York dominating the list of most rent-burdened metropolitan areas, Moody’s says the pandemic’s disruption of typical migration patterns has increased rent-to-income ratios in Sunbelt locales like Tampa-St. Petersburg and Orlando. These are the metros with the highest rent-to-income ratios for median-income households nationwide: 1. New York, New York (66.9%) 2. Miami, Florida (42%) 3. Fort Lauderdale, Florida (36.8%) 4. Los Angeles, California (34.7%) 5. Palm Beach, Florida (34.2%) 6. Northern New Jersey (33%) 7. Boston, Massachusetts (32.8%) 8. Tampa-St. Petersburg, Florida (29.9%) 9. Orlando, Florida (29.9%) 10. San Francisco, California (29.3%) It’s not news to [renters](https://money.com/millennials-rent-forever-never-own-home/) that they’re devoting a bigger share of their incomes on housing — but if they’re hoping for a new rent reality, they might not want to hold their breath. When Moody’s started its rent burden report about 25 years ago, only New York City qualified as rent-burdened. But now, paying 30% or more of your income for rent is increasingly becoming the norm in the U.S. Moody’s says lagging wage growth coupled with COVID-19’s impact on the [housing market](https://money.com/trends-shaping-spring-housing-market/) have exacerbated the issue. Rising [mortgage rates](https://money.com/current-mortgage-rates/), according to Moody’s economists, sidelined many would-be homebuyers, increasing apartment demand and driving rent prices to what renters are seeing now. While rent growth is finally slowing down — even declining — thanks to affordability issues and a slowdown in migration, renters shouldn’t expect prices to return to pre-pandemic levels in 2023. “We are not quite at an inflection point yet,” Chen and Le said in the release. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/rent-30-percent-income-norm/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Housing", "item": "https://money.com/housing/" }, { "@type": "ListItem", "position": 3, "name": "Renting", "item": "https://money.com/renting/" }, { "@type": "ListItem", "position": 4, "name": "Devoting 30% of Your Income to Rent Is Becoming the Norm in the U.S." } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/rent-30-percent-income-norm/#webpage", "url": "https://money.com/rent-30-percent-income-norm/", "name": "Devoting 30% of Your Income to Rent Is Becoming the Norm in the U.S.", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-05-16T19:53:10.000Z", "mainEntity": { "@id": "https://money.com/rent-30-percent-income-norm/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/rent-30-percent-income-norm/#breadcrumb" }, "dateModified": "2024-01-10T14:49:27.000Z" }, { "@type": "NewsArticle", "headline": "Devoting 30% of Your Income to Rent Is Becoming the Norm in the U.S.", "articleSection": "Housing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/05/News-Paying-30-income-on-rent.jpg?crop=0px%2C76px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Paying-30%-income-on-rent" } ], "author": [ { "@type": "Person", "name": "Mary Ellen Cagnassola", "url": "https://money.com/author/mary-ellen-cagnassola/", "@id": "https://money.com/author/mary-ellen-cagnassola/#author", "description": "Mary Ellen (M.E.) 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