Rent. It’s one of those unavoidable monthly expenses that quietly (or not so quietly) takes a huge bite out of your paycheck. But how much is “normal” to spend on rent these days? And how does your situation compare to others across the country?
According to a recent Nasdaq article, the average American now shells out about $1,748 per month in rent. That number can feel intimidating, especially if you’re trying to budget for groceries, transportation, savings, and—let’s be honest—just living your life. So let’s break down what that figure really means, and what you can do if rent is draining your bank account.
The Cost of Rent by Region: A Tale of Two Americas
Not all rent is created equal. Where you live plays a huge role in how much you’re expected to pay. For example:
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New York City renters have seen prices rise 30.4% since 2019. Meanwhile, wages have only increased by 20.4%, creating a significant affordability gap.
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On the other hand, in more affordable states like North Dakota, West Virginia, and Kentucky, average monthly rents are still under $1,000.
These regional differences highlight how skewed the rent landscape has become. In some places, $1,748 might get you a studio apartment with no windows. In others, it could rent a spacious two-bedroom with a backyard.
Renting vs. Buying: Which Is Smarter Right Now?
While rent is expensive, it’s still often cheaper than buying a home. In fact, across all of the 50 largest U.S. metros, renting a starter home is currently more affordable than owning. On average, renters save about $1,067 per month compared to homeowners when factoring in mortgage payments, property taxes, insurance, and maintenance.
That might seem counterintuitive—especially since homeownership is often seen as the “American Dream”—but in today’s market, renting could actually be the more financially sound choice, at least in the short term.
How Much Should You Be Spending on Rent?
Financial experts generally recommend spending no more than 30% of your gross income on housing, including utilities. That means:
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If you’re paying $1,748/month in rent,
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Plus around $300/month in utilities and internet,
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You’d need to make about $78,000 per year before taxes to stay within that recommended threshold.
But let’s be real—not everyone makes that kind of money, and not everyone has the luxury to choose their location. That’s why it’s important to explore creative solutions to keep rent from overwhelming your finances.
4 Practical Strategies to Tame Your Rent Expenses
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Upskill and Boost Your Income
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If you’re stuck in a high-rent area, the key might be increasing your income rather than cutting back. Learn in-demand skills, pursue certifications, or look for higher-paying job opportunities.
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Tip: Consider remote work or freelance gigs that can offer flexibility and more earning potential.
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Think About Relocating
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If your job allows it, relocating to a lower-cost area could save you thousands each year.
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For example, a move from Los Angeles to Tulsa, Oklahoma could cut your rent in half while still offering a decent quality of life.
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Negotiate With Your Landlord
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You’d be surprised how open landlords can be to negotiation—especially if you’ve been a reliable tenant. Ask if there’s any flexibility with your lease renewal, or offer to sign a longer lease in exchange for a rent discount.
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Try House Hacking
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Renting out a room, garage unit, or even splitting a two-bedroom with a roommate could significantly cut your costs.
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Apps like Airbnb or Furnished Finder can help you monetize unused space legally (just check local rules!).
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Looking Ahead: Is Relief on the Horizon?
Here’s the good news: while rents are still high—33.4% higher than pre-pandemic levels—the rate of rent inflation is finally cooling. In July 2024, rents were only 3.4% higher year-over-year, which is actually slower growth than we saw pre-COVID.
So while we’re not out of the woods yet, there’s a glimmer of hope for renters. Market stabilization could mean less sticker shock in the months ahead.
Final Thoughts: Be Proactive, Not Reactive
If you’re feeling the pressure of rising rent costs, you’re far from alone. The important thing is to stay informed, plan smart, and seek out options that fit your lifestyle and financial goals.
Renting doesn’t have to mean struggling—especially if you use the right strategies to keep your housing costs under control.
Source:
The Average American Spends This Much on Rent — See How You Stack Up (Nasdaq)