The American Dream is evolving, and many people are rejecting the white picket fences of yesteryear. In 2015, there are more Americans renting their primary residence than at any other time in U.S. history. While the number of renting households rises year after year, homeownership rates fell from 69.2% in 2004 to 63.4% in 2015. Homeownership rates haven’t been that low since 1967.
That data comes from a joint report by researchers at Harvard University and Enterprise Community Partners. The researchers also projected that a majority of new households will rent over the next decade, leading to higher demand for apartments for rent.
In big coastal cities, many renters are living paycheck-to-paycheck because the majority of their income goes toward that monthly rent check. A new survey from SmartAsset calculated the amount of income renters need to afford an average two-bedroom apartment in cities across the country. In San Francisco, renters need an annual income of $201,171 to afford the average two-bedroom apartment, priced at $4,694 a month. New York City, Los Angeles, Boston, and Washington D.C. round out the top five most expensive cities for renters.
And while that news might seem grim, renters who look inland live much more comfortably. According to SmartAsset, the number one most affordable city for renters in the country is Indianapolis, Indiana, where the average household can rent a one-bedroom apartment with just 11.7% of their income.
“Renters in Indianapolis are truly in a great position,” says Aurelia Vanderkolk, Marketing and Social Media Coordinator, Becovic Management. “They get all of the benefits of living in a big bustling city without the outrageous price tag that comes with other markets like San Francisco or New York. We as an Indianapolis property management company are able to offer renters more of the things they want like luxury upgrades and high end community amenities in desirable areas while still staying within their budget.”
Where else can renters go bargain hunting? The new report specifically cited Phoenix, Arizona; Green Bay, Wisconsin; Springfield, Missouri; and Louisville, Kentucky as prime hunting grounds for renters. While young professionals or seniors might be hard-pressed to afford rents in San Francisco, they could comfortably find luxury apartment rentals in the American heartland.
“Bottomline: good cities for renters abound. They are in interior America mainly. But know that millions of us are paying under $1000 per month in rent,” writes Robert McGarvey for TheStreet.com.