It has long been understood that big city living can come with a hefty price tag. Even some of the smallest apartments in New York City, for example, can set you back hundreds, if not thousands, of dollars a month. If you’re planning to move to a big city near you, you’ll need to make sure your paycheck can afford it.
Renters in the nation’s largest cities are paying an average of $1,759 a month, according to Realtor.com’s September Rental Report. That’s down about $20 from July when the median rate peaked.
Depending on how much money you earn each month, that rent may not be staggering. But in some of the nation’s largest cities, the rent is higher (sometimes much higher), adding to the already staggering costs of living in many of them.
The Department of Housing and Urban Development, as well as many financial advisers, recommend following a financial plan in which your rent-to-income ratio is less than 30%. Meaning if you make $100 a month, only about $33 should be spent on your housing costs.
Using that ratio, financial technology company SmartAsset calculated how much renters living in the nation’s 25 largest cities need to earn to afford both one-bedroom and two-bedroom apartments on average.
To determine the average annual income necessary to afford the median rent rates of both sizes of apartments, SmartAsset used a rent-to-income ratio of 28%, slightly below the HUD’s recommendation. Cities were then ranked based on how much renters would need to earn to afford an average two-bedroom apartment.
Unsurprisingly, SmartAsset found cities in California require renters to earn among the highest income levels to afford apartments. In San Francisco, Los Angeles, and San Jose, where the rent for either one or both of the apartment options reviewed was greater than $3,000 a month, renters would need to earn six-figure incomes to match the 28% ratio.
The same is true for five of the other cities ranking among the top 10 — though they, for the most part, have rents below $3,000 — a six-figure income was found to be necessary to meet the recommended ratio.
Below are the five cities with the highest income thresholds necessary to afford the average rent, as well as the income need for one-bedroom and two-bedroom apartments:
| City | Income for 1-bedroom | Income for 2-bedroom |
|---|---|---|
| San Francisco, CA | $125,200 | $170,961 |
| New York, NY | $149,411 | $163,325 |
| Los Angeles, CA | $99,018 | $132,882 |
| Boston, MA | $114,739 | $131,679 |
| Washington, DC | $97,696 | $130,607 |
Among the more affordable cities, renters in four could afford average apartments with an income of less than $50,000, according to SmartAsset. Those cities are Columbus, Ohio; Indianapolis; Detroit; and El Paso, Texas.
Here are the five most affordable cities for renters, based on SmartAsset’s review:
| City | Income for 1-bedroom | Income for 2-bedroom |
|---|---|---|
| El Paso, TX | $36,361 | $44,671 |
| Detroit, MI | $46,232 | $46,439 |
| Indianapolis, IN | $42,800 | $48,121 |
| Columbus, OH | $43,296 | $49,807 |
| San Antonio, TX | $47,246 | $59,957 |
These rankings also align with data from MIT’s Living Wage Calculator, which offers insights into how much you need to make to afford to live in your city, county, or state based on typical expenses like food, housing, taxes, and more.
Based on the findings from MIT’s Living Wage Calculator, a single adult living in the five cities with the more expensive rent listed above needs to earn a wage of more than $21 an hour. San Francisco has the highest rate at $25.55. Among the five cheaper cities, a single adult needs a living wage of between about $14 and $16 — Detroit has the highest living wage among these cities at $16.20.
There is hope for renters across the U.S. though. According to Realtor.com, the average rents for one-bedroom, two-bedroom, and studio apartments are starting to cool down.
