5 major cities in the US with the cheapest rent in 2023
With rental prices rising rapidly many are looking to exit to cheaper housing markets. Here is a look at five of these cities across the US.
Major financial institutions and advisors recommend spending at most thirty percent of one’s income on shelter. Going beyond this limit can result in a significant financial burden for most people. There are only ten states in the US where the average rental price, when divided by median income, is at most twenty-five percent of a worker’s paycheck. These calculations were made by dividing the Zillow median rental prices by SoFi’s 2023 median income data. Only half of the states recorded a ratio under thirty percent, meaning many rents across the country face a high-cost burden to access the rental market.
The US Census Bureau reported that in 2021, just under two-thirds of renters were either moderately (49 percent) or severely (25.4 percent) cost-burdened. Unsurprisingly low-income households were over-represented in this population. If you have a lower income, your ability to find an affordable city will depend on the availability of jobs and their corresponding salaries. High salaries do not always mean lower costs of living, and in certain situations, you may be able to stretch your paycheck further in cities where salaries are lower but rental costs are reduced.
A look at a few affordable cities
Before getting started, there is one note I would like to make. Much of this analysis used median income data for the cities and states listed below. Many reading this may be young professionals or parents looking to relocate their family, and may be below the median, and thus the rent-to-income ratio for them will be larger.
The first three cities we will cover can be found in the Midwest.
Madison, Wisconsin, has forty-six rental properties for less than the city’s median price of $954. If you earn the median income of $4,827 in the state and hope to follow the thirty-percent rule, you have plenty of options to rent and stay within budget. Looking more specifically at the city; in 2021, the median income was $70,466 and the median rental price was $1,212, coming out to a ratio of twenty percent of income spent on rental housing.
At the state level, the rent-to-income ratio in Indiana is just over thirty percent. Fort Wayne is one of the state’s most affordable cities, where the median rent is $777, and the median wage is $53,978. There are thirty properties within this range that would keep the share of income going to housing to under twenty-percent.
Next, we will head to Kansas, where in Topeka, residents have a median income of $50,870, and the median rental price is $865. This comes out to a rent-to-income ratio of twenty percent. Currently there are around fifty properties at or below the median price.
Ann Arbor, Michigan, is renowned for its excellent quality of life and affordable cost of living, making it a popular destination for young professionals and families. The city has a rent-to-income ratio of twenty-two percent, based on data from the US Census Bureau. However, prices have been on the rise, and Zillow shows very few results for rental properties under the median price of $1,382.
The largest city to make our list will be Philadelphia, Pennsylvania, where the median income is $52,649, and residents typically spend less than thirty percent of their check on housing. In 2021, the median rental unit had a price tag of $1,149. Today, there are over a thousand listings for homes that fall under that figure.