Phoenix among Top 20 cities for highest income needed to afford rent
By: AZ Big Media
Rising rents have made it increasingly difficult to live comfortably in large cities, where the cost of living is already high. In a new study, SmartAsset calculated the income needed to comfortably afford rent in the 25 largest U.S. cities and our findings show Phoenix ranked among the 20 cities with the highest income needed to afford rent.
Rising inflation and high interest rates have made affording basic necessities like housing challenging and it’s easy to spend more than what you are comfortable with. Nationally, renters can expect to pay upwards of $1,800 on average for a two-bedroom apartment. Housing costs in large cities like New York and Los Angeles are especially high, and when you consider the additional costs of living, it can be anything but comfortable.
The Department of Housing and Urban Development (HUD) recommends a rent-to-income ratio of less than 30% and considers households who spend more than 30% of their pre-tax income on housing to be housing cost-burdened.
Using HUD’s guidelines, SmartAsset examined the income needed to pay rent in the 25 largest U.S. cities for a one- and two-bedroom apartment based on a rent-to-income ratio of 28%, which we set just below the standard threshold. Though we calculated income needed for both a one- and two-bedroom apartment, cities are ranked on the latter figure. For details on our data sources and analysis, read our Data and Methodology section below.
This is SmartAsset’s eighth study on the income needed to pay rent in the largest U.S. cities. Check out the previous version here.
Phoenix ranks No. 17 in the U.S. for highest income needed to afford rent: In Phoenix, it would take a salary of $56,836 to afford a one-bedroom apartment, which averages $1,326 per month. It would take a salary of $69,754 to afford a two-bedroom apartment, which averages $1,628 per month.
Average rent for a two-bedroom apartment exceeds $3,000 in six cities. This figure nears $4,000 in San Francisco and New York. The four remaining cities with average two-bedroom apartment rents greater than $3,000 are Los Angeles, Boston, Washington, DC and San Jose.
Income needed for a two-bedroom apartment is 2.4 times higher than the median household income in New York City. The Big Apple is also the only city of those we considered where the income threshold is more than two times higher than the median household income. Los Angeles, which has the second-highest ratio, requires income that is 1.9 times higher than the median household income.
California cities require significantly higher income to afford rent. Even in the least expensive California city – San Diego – renters need to earn about $99,700 to comfortably afford a one-bedroom apartment and almost $128,300 for a two-bedroom apartment.