This State Has No Affordable Cities for the Average Homebuyer or Renter: What Should Residents Do?
Written by
Martin Dasko
Edited by
Zuri Anderson
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According to a report from Realtor.com, Rhode Island has no affordable housing options for homebuyers or renters. This shouldn’t come as a surprise because earlier this year, a report from the National Association of Home Builders revealed that Americans need to earn about $141,000 to be able to afford a median-priced home.
The report noted that 75% of American households were unable to afford the median-priced home of $459,826 with a 30-year mortgage, which means that over 100 million households were priced out of the market.
A recent report released by the National Association of Realtors found that the number of first-time home buyers sank to a record low of 21%, and the typical age of a first-time buyer reached an all-time high of 40. While the situation isn’t ideal nationwide, Rhode Island appears to have a particularly challenging housing affordability problem.
Based on the Realtor.com report’s findings, we will review the current housing situation in Rhode Island, identify what’s contributing to it, and list possible solutions.
The Reality of the Housing Situation in Rhode Island
The article cited that according to the 2025 Housing Fact Book, which was released by HousingWorks RI at Roger Williams University, a household would need an annual income of close to $130,000 to afford a median single-family home in any municipality in Rhode Island with a fixed 30-year mortgage rate, based on 2024 prices. The problem is that this amount exceeds the state median household income ($86,000) by over $40,000.
On the rental side, things aren’t much better in the state. To rent an average two-bedroom unit based on 2024 prices, you would need a household income of $60,000. However, the median renter’s income is $48,434, making rentals unaffordable for Rhode Island residents.
The report also emphasized that a third of Rhode Island households, which works out to 142,920, are cost-burdened, and 44% of those (62,237) are severely cost-burdened. This means that they’re spending more than 30% of their annual income on housing costs.
What’s Contributing to This Situation?
Hannah Jones, a senior economic research analyst at Realtor.com, noted that limited inventory has kept housing prices high since the pandemic. In October 2019, the state had about 3,500 listed for sale, and six years later, this figure has dropped to around 1,700.
With such limited inventory, a severe supply-and-demand imbalance has been created in the state. This means that finding an affordable home is difficult, since those that reach the market sell quickly with intense competition and top-dollar prices.
How Can Housing Become More Affordable in Rhode Island?
Experts and economists agreed that increasing housing supply is necessary to improve affordability in the state. Home price growth won’t slow down until new listings and construction can keep up with demand.
However, the report revealed that for this to happen, elected officials at all levels have to work together. It was noted that Rhode Island’s red tape makes it challenging to increase construction due to various zoning restrictions and the permit process.
The state introduced a law in June 2024 to simplify homeowners’ ability to build an accessory dwelling unit on their property and increase housing options. However, experts believe more could be done, such as converting abandoned buildings into housing.
What Can People Do To Make Housing Costs Cheaper in Rhode Island?
While the experts shared insights on what the government can do, here’s what regular people can do to bring down housing costs.
Consider House Hacking
“A lot of buyers are able to recoup mortgage costs by renting out part of their property,” said Ben Mizes, a licensed real estate agent and co-founder of Clever Offers. Whether it’s a basement unit, an extra room, or a converted garage in a market like Rhode Island, this could be what makes home ownership possible. While the home may be too expensive with your household income, that rental unit could bring in enough money to help you cover the costs.
Get Creative With Co-Buying and Co-Living
Mizes noted that his company has seen more people teaming up with friends or family to purchase multi-family homes. Since most households can’t afford to buy a home, they have to combine households to make homeownership a realistic possibility in this market. This logic also applies to renting, as people may have to live together in a multi-family home to help make it more affordable.
Tali Raphaely, a real estate attorney and president at Armour Title Company, also brought up that co-living, which consists of different tenants all living under the same roof, but with each tenant having their own room in the house as their living quarters, is becoming more popular in expensive cities.
“Many landlords are buying houses primarily for this purpose, and others are reconfiguring their existing investment properties for this type of arrangement,” he explained. While sharing space with other people isn’t ideal, it may be a necessary sacrifice in this situation until finances become more manageable.
Renegotiate Your Rent
“On the rental side, tenants can usually negotiate a better deal by making longer commitments or paying just slightly above market for rent and asking for fixed annual raises,” Mizes explained.
As a tenant in a market like Rhode Island, you may want to consider making a longer commitment to negotiate a better deal and save on your housing costs.
While all of these solutions involve sacrifices, it’s important to mention that they may be temporary until the situation improves. The Realtor.com report noted that, at the extreme end, many Rhode Islanders are fed up with the situation and moving out of state to places like Virginia and the Carolinas.
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