Photo: Robert Clark
Living on your own in one of the country’s hip urban meccas is a dream for many a Millennial.
But the reality is renters would need to earn at least, or close to, six figures just to afford the typical studio or one-bedroom in some of the largest US markets, according to a recent study by home and decor site Apartment Therapy.
Using data from the listing site RentCafe, Apartment Therapy compiled average rents for studio and one-bedroom apartments in 20 of the most populous US cities, including New York City, Los Angeles, CA, and Chicago, IL.
The salary needed to live solo was estimated based on the industry guideline that monthly rent should be 40 times your annual gross income. The national median salary is currently just about $45,000 per year, and the national average rent reached an all-time high of $1,409 in July.
Unsurprisingly, the Big Apple was the most expensive city to live on your own. The typical Manhattan studio rents for $2,929 and the average one-bedroom goes for $3,756 — requiring annual incomes of $117,160 and $150,240, respectively.
Two white-hot West Coast markets rounded out the top three, San Francisco, CA and San Jose, CA.
Living on your own in the Golden Gate City would require renters to earn $101,600 to afford a studio and $135,720 for a one-bedroom apartment.
Angelenos, meanwhile, would need to make $82,560 to afford their own studio and $99,160 to have a one-bedroom all to themself.
Renters in white-hot cities might find it difficult to find relief from sky-high rents.
“For as long as there are enough renters that can afford these high prices, the market is not going to react, and those who are outpriced are forced to move farther away from the sought-after areas and settle for a longer commute,” RentCafe researcher Balazs Szekely tells Livabl.
And, with rents steadily on the rise in these markets and national wage growth falling behind, the typical renter may not be able to afford to make the move from renter to homeowner anytime soon.
“People rent either by choice or by necessity, but home prices have also been growing at a faster pace than rents, which may have discouraged many renters from making the big move,” says Szekely.
There were pockets of affordability.
The typical studio in Jacksonville, FL requires a yearly gross salary of $26,520 and $27,280 a year gets you the average one-bedroom in El Paso, TX.
Meantime, soaring rents and sky-high home prices in some cities may have exacerbated a rising trend in the market — mobility. There is a strong correlation between the affordability crisis in some cities and huge, sudden population increases in others.
“Coastal cities are losing their appeal, while some Texas cities, California’s Central Valley and the Phoenix area have gained popularity as destinations in the quest for affordable living in recent years,” says Szekely.
Click here to read the entire study.