US renters remain burdened, but some metro areas saw relief in first half of year

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Redfin CEO Glenn Kelman says it's hard to fault the Fed for overdoing rate hikes when there are other persistent sources of inflation.

American renter households remained burdened in the first half of 2023 as tight inventory caused rents to remain elevated, but renters in some metro areas experienced some relief, according to a new report from Moody’s Analytics.

The nationwide average rent-to-income ratio declined slightly in the first half of this year, declining to 30.2% from a high of 30.8% last year – which was the first time ever that median-income renter households paid more than 30% of their income on an average-priced apartment. Renters are considered «burdened» if their rent consumes 30% or more of their gross, or pre-tax, income.

«What that means is, by and large, the U.S. is still rent burdened because we are officially above that 30% rent-burdened threshold,» Lu Chen, a senior economist at Moody’s Analytics specializing in commercial real estate, told FOX Business. «We are seeing levels of relief but also combined with the inflationary pressure elsewhere, so we're still spending a little higher on the necessities – on food and energy along with other necessary spending.»

US HOUSING AFFORDABILITY AT ALL-TIME LOW

Moody's Analytics found that American households that rent remained burdened in the first half of 2023, facing a 30.2% rent-to-income threshold for an average priced apartment. (Frederic J. Brown/AFP via Getty Images / Getty Images)

Chen noted that several large metro areas – including New York, Miami, Los Angeles and Boston – are typically always considered rent burdened and remained so in the first half of 2023. In the first quarter, New York had the highest rent-to-income ratio at 64.9%,