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- The "singles tax" for solo renters has increased to an annual average of $7,110.
- New York City has the highest singles tax among major cities analyzed in a recent Zillow analysis.
- Zillow's Emily McDonald said the rental market is "normalizing," but affordability is an issue.
Sorry singles: In today's economy, it pays to be coupled up — at least if you're looking to rent.
It's no secret that rental costs and the current economic climate favor couples; after all, DINKs — couples who are double income, with no kids — are living it up and not just because they can split their rent.
Single Americans may be interested in the luxury of their own bathroom, kitchen, and living space. But just how much is it costing you to not be living with a valentine? Zillow crunched the numbers on what's called the "singles tax," or how much more singles are paying to live alone without a partner or a roommate.
It's bad news for solo renters: The singles tax has gone up from last year's nearly $7,000 a year premium, according to a recent Zillow press release. A single American renter is now paying an average of $7,110 extra for a one-bedroom place.
Zillow published what the singles tax looks like in several major cities. As seen in the table below, some of the places with high singles tax are also places where it's already costly to live.
Zillow looked at 50 major cities using "a combo of Census data and what's available on Zillow to give us that comprehensive look," Emily McDonald, Zillow rental trends expert, told Business Insider. New York City's estimate is based on StreetEasy data, McDonald added.
New York ranked No. 1 among the 50 places, with a singles tax of around $20,000. San Francisco ranked No. 2 with a singles tax of over $13,000.
McDonald said to find the singles tax, "we calculate the annual amount that one person would pay in rent and divide that number in half, which is the additional amount that a single person would pay when they don't split that rent with a partner or a roommate."
That doesn't mean that singles are faring worse everywhere, at least compared to last year, according to McDonald.
"Varying upon where you're looking or what's happening with rent prices in your city, the singles tax may have gone up, it may have gone down," McDonald said. "The rentals market is kind of all over the place right now."
The singles tax might mean more than just losing out on spending money or tightening budgets to afford that coveted one-bedroom rental. A report from realtor.com finds that cohabitating to save up on rent could "help expedite saving for a future home purchase."
However, it's not all bad news whether you are living alone or not. McDonald said that, overall, the rental market is "normalizing." While rent prices are still up year over year, the increase is a lower annual growth rate than pre-pandemic, McDonald said.
"Yes, your rent might be going up, but it's not going up as fast as it was and as drastic as it was in the height of the pandemic," McDonald said. "So that's good news for renters. But overall, there's obviously still a major affordability problem in the country."
And the singles tax isn't meant to shame your plans to watch rom-coms in an empty place; it's meant to show the financial realities of the situation. In an age where the American nuclear family is getting shaken up, and just under half of Americans over the age of 18 are single, the finances of renting haven't caught up with the times.
"Our full intent of putting this out there is so that renters can understand the data, know what they're getting into when they go to look to sign a new lease and think about that and say, 'OK, is this a good idea? Is the trade off of living alone worth it to me or is it worth it to find a roommate?'" McDonald said. "Or if you are coupled up, talk about moving in together. And of course we're not going to tell people what to do. It's always going to be a personal decision."
And, if you're looking for extra money, you can always get your cat on social media. Some pet influencers are making enough to offset the singles tax.
How much do you spend living alone? Reach out to these reporters to share at mhoff@businessinsider.com and jkaplan@businessinsider.com.