This Is the Median National Rent. Can You Afford It?

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Looking to rent a home? Read on to see what price you might be looking at. 

During the pandemic, rent costs plunged as landlords struggled to fill vacancies. But since 2021, rent prices have been climbing steadily. Not only have a lot more people needed to rent a home in the wake of the pandemic, but housing prices have been sky high since 2021. And since mortgage rates are so expensive these days, more would-be buyers have been pulling out of the real estate market and looking to rent for a while instead.

It’s not surprising, then, to learn that the median rent price across the U.S. was $2,305 as of the end of 2022, according to new data from HouseCanary, a national real estate brokerage. Here’s a more detailed breakdown of median rent prices by unit size:

Of course, median rents can vary tremendously from certain parts of the country to others. You’re apt to spend a lot more to rent an apartment in New York City, for example, than one in Omaha.

But given that rent prices are up across the board, it’s important to know how much rent you can afford. And there’s an easy formula you can use to make that determination.

Keep your rent costs to 30% of your income or less

To avoid a financial crunch, it’s a good idea to make sure your housing costs do not exceed 30% of your take-home pay. Now, if you’re a homeowner, that 30% shouldn’t just include your monthly mortgage payment. It should also account for your property taxes, homeowners insurance, and HOA fees, if you live somewhere that charges them.

Since renters don’t pay property taxes or HOA fees, and the cost of renters insurance tends to be considerably lower than the cost of homeowners insurance, when you’re a renter, you really only need to account for the cost of your rent itself when calculating that 30%. So if, for example, you bring home $4,000 a month in your paychecks, you should be good to spend up to $1,200 a month on rent.

There are exceptions to the rule

Keeping your rent to 30% of your income or less is a generally good bet. But in some expensive cities, you might need more wiggle room. You can feel free to allocate a higher percentage of your income to rent, however, if you’re not spending much or any money on transportation, which many large cities allow for.

Going back to New York City, well, it has a subway that runs all through the day and night. And your neighborhood might be really walkable. So all told, you might spend very little on transportation by living in New York City by virtue of not needing a car. In that case, spending, say, 40% of your pay on rent isn’t unreasonable.

Otherwise, do your best to stick to that 30% limit. It may be harder with rent costs being so high, but it could save you a world of financial stress.

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