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- Rental price growth is outpacing wage growth in most US cities, especially in New York.
- However, cities like Austin, Portland, and Salt Lake City have seen wages grow faster than rent.
- The gap between income and cost of living continues to widen, even in cities with strong wage growth.
It's a tough time to be a renter.
A new Zillow and StreetEasy analysis finds that rental price growth is far outpacing wage growth in most big cities — and New Yorkers are particularly screwed. In New York City, rents increased seven times as fast as wages from 2022 to 2023. Similarly, renters in Boston, Cincinnati, and Buffalo are seeing their wage growth dwarfed by their rent increases.
But it's not all bad news for prospective and current tenants: There are still a handful of cities where wage growth has outpaced rent increases.
Notably, some of these cities — including Austin, Portland, Oregon, and Salt Lake City — are among the trendiest in the country. Wages grew more than 5% between 2022 and 2023 in San Jose, Houston, Salt Lake City, Minneapolis, and Riverside, California. While rents are ticking up in Houston, the city has also seen some of the fastest wage growth in the country.
In some cases, big employers have relocated to these metros, bringing in a slew of well-paid jobs. In Austin, tech companies like Apple, Amazon, and Tesla have helped boost average incomes. And while demand for housing has surged as a result, the metro area has managed to meet that demand with a ton of new housing.
Austin is building homes at twice the rate the rest of the country is, and almost nine times as fast as Los Angeles, San Francisco, and San Diego, The Atlantic reported earlier this year. As a result, rents and home prices have actually fallen steeply in Austin recently. Still, the city has struggled to build the kind of medium-density, middle-income housing it's in desperate need of.
Like much of the rest of the country, Salt Lake City has underbuilt housing since the financial crisis. And like Austin, the city has seen a surge of new residents in recent years, including many escaping sky-high living costs in California. Predictably, home prices are way up. But the city has managed to maintain a much more affordable rental market. While wages rose by 5.5% between 2022 and 2023, rents increased by just 0.8%, the Zillow/StreetEasy report found.
Southern cities like Raleigh and Charlotte, North Carolina, have managed to keep rental increases relatively low — at 1.1% and 1.7%, respectively — while welcoming in lots of transplants.
But even those tempered increases might not mean every resident is thriving. Not all wage growth can be earmarked for rent increases — people do have to buy things like food and clothing — and even in some areas where wages are growing, rent increases have been massive.
In Miami, rents have grown by nearly 53% from 2019; even though wages there slightly outpaced rent growth from 2022 to 2023, rents outgrew wages by 32% from 2019 to 2023. As the report notes, that's left "a huge gap between the income residents are earning and the income they need to afford to live in the area."
That shows there's still an uphill battle for many of the new metro hubs Americans are flocking towards, especially as locals might find themselves priced out by newer residents bringing in bigger-city salaries. After all, if you want to find some native Floridians, they might already be in Georgia or Tennessee.
Have you seen your rent go up faster than your wages, or vice versa? Contact these reporters at jkaplan@businessinsider.com and erelman@businessinsider.com.