Here’s an interesting (or depressing) exercise depending on where you live.
- Take your monthly rent and multiply by 12
- Divide that number by your annual income before taxes
- Multiply by 100
What’s your number?
If it’s higher than 30, you aren’t alone. More than one-third of all Americans spend more than 30 percent of their income on rent. If your number is higher than 45, you probably live in Los Angeles.
About now you’ve probably started asking yourself, “how much should you spend on rent“? And how does that compare with other Americans?
We looked at data from the U.S. Census Bureau’s 2012 American Community Survey to see how much of their income American’s are spending on rent in various cities throughout the U.S. In ten of the top twenty-five metro areas, Americans spent more than 30 percent of their income on rent.
Perhaps not surprisingly, California is home to six of the regions where renters spent the most of their income on rent, with Angelenos spending close to half of their incomes on rent.
- Los Angeles – 47%
- Miami – 41%
- San Diego – 41%
- San Francisco – 40%
- New York – 39%
- Riverside – 36%
- San Jose – 33%
- Tampa – 32%
- Sacramento 32%
- Chicago – 30%
Even if you don’t live in one of the top 10 areas, it’s likely you are spending more on housing than ever before.
New data out from the Bureau of Labor Statistics shows that 33 percent of Americans spent more than 30 percent of their income on housing in 2013. That’s a 13 percent jump from two decades ago.
So just how much do apartments cost in the top five metros? Using HotPads rental data, we found the median rental price for apartments during the month of October.