Does the $4,800 Renter’s Budget Gap Affect You?
Written by
J. Arky
Edited by
Rebekah Evans
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Are you someone who rents, specifically a room in an apartment or home with one or more roommates? Then it is time to pay attention to a major flux in the rental market that could be affecting you, depending on where you call home.
A study from SpareRoom found that the rental affordability is being pushed to its limits around America, with rents hitting record highs and renters in large metropolitan areas potentially forced to pay up to $4,800 a year over their budget.
The Current Average Roommate Rents Looks Grim
During the middle part of 2024, the report found that average roommate rents were at an all time high in the 83% metro areas around the United States. While there was some hope of a rental market stabilization to come in 2025 due to supply and demand rebalancing, that might be wishful thinking now.
Some exceptions included cities like New York, Los Angeles, San Francisco, Washington D.C. and Boston, where rents peaked in 2023. However, the data found that 24 of the 29 busiest metro areas in the country set new records in terms of monthly rent payments by the halfway point of 2024.
Though, it’s important to note that while these cities might not have seen their rents increase in the last year, they still have some of the highest rents in the U.S.
“When you look at how much rents have risen over the past year it’s easy to see why renters are feeling so stretched,” explained Matt Hutchinson, spokesperson for SpareRoom. “But it’s only when you look at them alongside the typical renter’s budget that you realize just how vast the affordability gap really is.”
The new findings indicated that the most expensive city for roommate rent was New York, which is currently averaging to $1,540 each month. The next highest city was Boston at $1,360 a month, followed by San Diego with $1,340 per month.
Based on an analysis of 70,040 ‘room wanted’ ads from June to September of 2024, SpareRoom’s study reviewed and calculated the average renter’s budget within 20 of the busiest cities in America. The data revealed that Denver takes the top spot for being the most unaffordable city for roommates with a budget gap of -$402. Austin was next with -$349 and then Dallas at -$345 in terms of budget gaps. The conclusion was that typical renters across the most bustling metropolitan areas in the country have sustainable budgets to cover the average monthly rent in their city.
An Unknown Future for Renters
“As rents continue to hit record highs, renters are being forced to stretch their budgets yet again,” Hutchinson said. “The question is just how far can they stretch before it becomes one rent rise too many?”
It remains yet to be seen what happens with rental prices in these areas, along with the rest of the country, but for now, they show no signs of going down, which could put further strain on renters as they try to make their monthly payments in 2025.
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