Rents have outpaced wages in nearly 9 out of 10 major metros since 2019 + tools to help affordability crunch

By Orphe Divounguy , Senior Economist at Zillow

Key Takeaways:?

• U.S. rents have grown 1.5 times faster than wages since 2019.?
• This trend cooled last year to give renters some breathing room, but there remains a long road ahead for a more affordable rental market.?
• Zillow and StreetEasy advocate and are building tools for a more accessible, equitable and modern housing market.

Rent prices have surged in recent years, and wages have not kept pace. Since 2019, U.S. rents have grown 1.5 times faster than wages.

The positive news is that this trend cooled last year as national rent growth (3.4%) was outpaced by wage growth (4.3%), giving renters some breathing room in many markets. Strong multifamily construction has helped absorb demand for apartments, keeping rent growth in check and allowing wages to begin to catch up.

There is still a long road ahead. Zillow data shows the typical American renter spends 29.2% of their income on monthly rent, just barely under the 30% threshold for what is considered to be housing cost burdened. That share of income the typical renter spends on their monthly payment is as large as 43% in the Miami metro area, where rents have grown 53% since 2019.?

Check out the full report here.

How Zillow and StreetEasy are helping renters?

Zillow and StreetEasy — the Zillow brand built for New York City —? have a number of tools that help renters with affordability and access.

The upfront costs of finding a place to rent can be steep, which limits the ability of renters to move to a place that better suits them — perhaps a bigger home for a growing family, or a home in a different neighborhood closer to work or relatives. Zillow research shows these costs tend to be higher for renters of color.?

In New York City, upfront costs average almost $10,500, with broker fees often the largest expense. Lowering upfront rental costs will open up more options for New York renters, which is one of the reasons Zillow and StreetEasy are advocating for broker fee reform.?

To help cut down on those upfront costs, Zillow offers a universal rental application that allows renters to apply to an unlimited number of participating rentals for 30 days for a flat fee of $35. That is compared to the $60 in application fees that the typical U.S. renter pays across all the rentals they apply for.

Zillow also has tools that help renters gauge the full affordability picture before signing a lease. All apartment building listings on Zillow show a “costs & fees” breakdown highlighting certain one-time costs, such as application fees and security deposits, as well as recurring costs, such as parking or pet fees.?

Zillow rental listings also include rooms for rent — options to rent individual rooms in units or homes — putting more budget-friendly and flexible living arrangements front and center in a renter’s search. Renters using Zillow can include "room" listings in their searches alongside traditional "entire place" options.

Too many are burdened by the cost of housing, limited options and discriminatory barriers. Zillow advocates for a more equitable and modern housing market, including by shining a light on these issues through research. You can read more of Zillow’s fair housing research here .