These Are the Most Affordable Metros for Renters — But What About Their Housing Markets?
Written by
Gina Hagler
Edited by
Travis Woods
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Zillow’s Rental Market Report for June 2024 reveals that rent is growing at the fastest rate in nearly a year. Reportedly, landlords and property managers are less incentivized to offer concessions now that rent levels are seeing month-over-month growth values similar to those pre-pandemic. Rent has increased a staggering 32.8% overall since the beginning of the pandemic. More specifically, single-family rent has risen 39.6%.
Given the rise in rent, even from just the last year, there is the question of which metros are the most affordable. According to Zillow, the most affordable metros for rent are Minneapolis, Salt Lake City, St. Louis, Austin and Raleigh. Minneapolis, the most affordable, sees 20.4% of median income spent on rent. That value is only marginally higher for Raleigh, at 21.3%. Conversely, renters spend roughly 43.4%, 42.1% and 37.4% in the most expensive metros, Miami, New York and Los Angeles, respectively.
Taking the affordability a step further, we can consider what the housing market is like in the corresponding metro areas to determine whether an individual could reasonably transition from renter to homebuyer. This would entail the consumer spending near the average monthly rental value in the corresponding metro, were they to switch to purchasing a home.
Minneapolis, Minnesota
According to Zillow, the median home sale price in Minneapolis is $324,933. Based on this value and a 20% down payment, the total monthly payment would be $1,955 based on Smart Asset’s mortgage calculator (which factors principal and interest, along with home insurance, taxes and other fees). The median rent in Minneapolis for a single bedroom apartment is $1,463, according to Zillow‘s Rental Manager. As a result, to transition from renter to homeowner in Minneapolis will require an increase of 33.6% for housing each month.
Salt Lake City, Utah
The median home sale price in Salt Lake City is $562,000. Using the previous calculation, the total monthly payment would be $3,306. The median rent in Salt Lake city is $1,757. This would mean a renter transitioning to homeowner would spend 88.2% more on housing each month, under the same method of comparison.
St. Louis, Missouri
The median home sale price in Saint Louis is $203,333. This translates to a total monthly payment of $1,262. Meanwhile, the median rent is $1,249. This means a potential homebuyer would only need to spend about 1.04% more each month.
Austin, Texas
Austin’s median home sale price is $548,333, meaning the total monthly payment would be $3,228. According to Zillow, the median rent in Austin is $1,689. Going from renter to homeowner would require 91.1% more for monthly housing.
Raleigh, North Carolina
Raleigh’s median home sale price is $429,667. The total monthly payment comes out to $2,730. The median rent is $1,535, which results in an increase of 77.9% per month.
Based on these five affordable metros, Saint Louis presents the strongest case for someone to transition from renter to homeowner — as the monthly payment is nearly identical. Minneapolis, with 33.6%, is less compelling, though it still fares much better than the remaining three, each of which entail well over 50% more in monthly payments.
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