Renters are struggling to catch a break. In seven of the largest U.S. cities, the average household would need to make at least six figures to comfortably afford the rent on a two-bedroom apartment, according to a new study by SmartAsset, a personal financial website. SmartAsset researchers looked at how much it takes to afford average rental rates in the nation’s 25 largest cities.
Households that spend more than 30 percent of their incomes on housing are considered “cost burdened” by most economists. SmartAsset researchers found rents in California’s largest cities took some of the biggest bites out of American's paychecks. Four California cities ranked in the top 10 on the list: San Francisco, Los Angeles, San Jose, and San Diego. San Francisco renters need the most income at $187,800 to afford a two-bedroom apartment, according to the study. The average household income in San Francisco, meanwhile, is $103,801 per year.
SmartAsset
A separate study, recently released by PropertyShark and RentCafe, found that if renters could save enough for a down payment they may fare better as homeowners. Renters in more than half of the 50 cities in the study could barely make it until payday, while in 44 of the 50 cities tracked, homeowners were projected to be able to save money each month. Homeowners can save $3,500 a month in San Jose, Calif., and $2,600 in San Francisco, according to the study.
