Philly-area renter households make $22,300 less than they need to afford a typical apartment for rent

The typical Philadelphia-area renter household makes about $22,300 less than needed to afford the typical asking rent for an apartment, according to a report by the online real estate brokerage Redfin.

In the Philadelphia metropolitan area, just 35% of renter households make enough money — $77,900 — to pay $1,948 a month, the median price of an apartment for rent this spring. Nationwide, 39% of renter households make enough money, according to a report Redfin published last month.

The analysis looked at asking rents in March, April, and May for newly listed apartments in buildings with five or more units. Redfin considered rents affordable if a renter household would spend no more than 30% of its monthly income on rent, a widely used measure of affordability.

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Nationally, the typical renter household makes about $54,700 a year. But they’d need to make roughly $11,400 more to afford the typical asking rent of $1,653. The necessary income for affordability is the highest it’s been since October 2022. Asking rents from March, April, and May were up 23% from the same time period before the pandemic, according to Redfin.

Renters can afford median asking rents in only five of the 33 major metropolitan areas that Redfin analyzed.

Sheharyar Bokhari, senior economist at Redfin, said that although many U.S. renters will remain burdened by housing costs, asking rents should get a bit more affordable because rents aren’t rising like they once were.

Demand for apartments is strong, thanks in part to households that continue renting because they can’t afford to buy a home. But newly built apartments are capping rent growth.

“Rents are growing at a snail’s pace compared to the rapid increases we saw during the pandemic and are unlikely to soar again anytime soon,” Bokhari said in a statement. “As a result, wage growth should continue to outpace rent growth in the coming months, as it has been doing since 2022.”

The biggest gap between renter incomes and what’s needed for asking rents is in the New York metro, one of the country’s most expensive rental markets. Rents jumped 9% from a year earlier, which was one of the largest increases in the country.

Renter households make about $67,400 but need to make roughly $119,100. The median asking rent this spring was $2,978.

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Next in the least-affordable list is the Miami metro, where the typical renter household makes about $57,500 but needs roughly $99,400 to pay the median asking rent of $2,486.

The Austin, Texas, metro area is the most affordable place for renters out of the 33 major metro areas Redfin analyzed. There, the typical renter household makes about $10,500 more than needed to afford the typical asking rent.

Washington also made the list of five metros where renters can afford typical asking rents. That’s because it’s got lots of high-income renters. The typical renter household makes about $2,700 more than needed to afford asking rents. But those rents are up 11% from a year earlier, so that gap is shrinking. Last year, the typical Washington renter households made about $6,500 more than needed.