Renters are getting more bang for their buck thanks to the recent apartment construction boom, which has led to asking rents stabilizing below their pandemic peak
SEATTLE–(BUSINESS WIRE)–
(NASDAQ: RDFN) — A U.S. renter on a $2,000-a-month budget can afford an apartment that is more than 70 square feet larger today than it was when rents peaked in mid-2022. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
The median U.S. apartment asking rent in October was $1,615. That equates to a median price per square foot of $1.81, meaning the projected apartment size for a $2,000 budget would be 1,103 square feet.
The median asking rent peaked at $1,700 in August 2022 when the typical apartment was listed at an all-time high of $1.94 per square foot, equating to a 1,029 square foot apartment for a $2,000 budget—74 square feet smaller than today. That’s the equivalent size of a small home office.
|
Rental Budget |
Projected |
Projected |
Difference |
|
$1,000 |
551 square feet |
514 square feet |
+37 square feet |
|
$1,500 |
827 square feet |
771 square feet |
+56 square feet |
|
$2,000 |
1,103 square feet |
1,029 square feet |
+74 square feet |
|
$2,500 |
1,379 square feet |
1,286 square feet |
+93 square feet |
|
$3,000 |
1,654 square feet |
1,543 square feet |
+111 square feet |
Five years ago in October 2019, before the pandemic housing boom caused rents to spike, the U.S. median asking rent was $1,337, equating to $1.47 per square foot. That means the projected apartment size for a $2,000 budget was 1,359 square feet—256 square feet larger than today. For context, the average bedroom in the U.S. is roughly 130 square feet.
“Renters are getting more for their money than they were during the pandemic because asking rents have since stabilized below their record high, and incomes have continued to climb,” said Redfin Senior Economist Sheharyar Bokhari. “Rental affordability has improved thanks to the recent apartment construction boom, especially in Sun Belt states. That trend is likely to continue into 2025, as there are a lot of still-to-be-finished apartment buildings due to come online.”
Renters get more value for money in larger apartments
Generally speaking, smaller apartments have a higher price per square foot than larger apartments.
In October, one square foot of space in a 0-1 bedroom apartment cost $2.09, while in a 3+ bedroom apartment, it only cost $1.51.
|
Median Asking Rent (October 2024) |
Price Per Square Foot (October 2024) |
Square Footage ($1,000 Budget) |
Square Footage ($1,500 Budget) |
Square Footage ($2,000 Budget) |
Square Footage ($2,500 Budget) |
Square Footage ($3,000 Budget) |
|
|
0-1 Beds |
$1,473 |
$2.09 |
478 |
717 |
956 |
1,196 |
1,435 |
|
2 Beds |
$1,695 |
$1.62 |
617 |
925 |
1,234 |
1,542 |
1,850 |
|
3+ Beds |
$1,980 |
$1.51 |
663 |
995 |
1,326 |
1,658 |
1,989 |
Part of the reason the price per square foot is higher for smaller 0-1 bedroom apartments is because they are more concentrated in densely populated metros like New York, where rents are more expensive.
A renter on a $2,000 budget in Memphis can get 1,000 more square feet than a San Jose renter on the same budget
Geography also plays a major role in determining the size of an apartment that can be rented for a specific budget. A renter on a $2,000-a-month budget can afford an apartment larger than 1,000 square feet in more than half of the major metro areas we analyzed in October.
Renters in Memphis get the most value for their money, with $2,000 being enough to afford a 1,570-square-foot apartment. Birmingham, AL (1,523 square feet), Louisville, KY (1,479 square feet), St. Louis, MO (1,388 square feet) and Houston (1,380 square feet) round out the five metros where $2,000 rents the most space.
Metros Where $2,000 Rents The Most Space (Square Feet)
|
All Apartments |
0-1 Bedroom |
2 Bedrooms |
3+ Bedrooms |
|
|
Memphis, TN |
1,570 |
1,358 |
1,664 |
No data |
|
Birmingham, AL |
1,523 |
No data |
No data |
No data |
|
Louisville, KY |
1,479 |
1,301 |
1,579 |
No data |
|
St. Louis, MO |
1,388 |
1,265 |
1,468 |
1,547 |
|
Houston, TX |
1,380 |
1,281 |
1,471 |
1,535 |
|
Raleigh, NC |
1,334 |
1,153 |
1,440 |
1,504 |
|
Indianapolis, IN |
1,333 |
1,168 |
1,448 |
1,537 |
|
Cincinnati, OH |
1,331 |
1,189 |
1,189 |
1,445 |
|
Cleveland, OH |
1,316 |
1,158 |
1,443 |
1,484 |
|
Jacksonville, FL |
1,297 |
1,110 |
1,415 |
1,494 |
The story is very different on the west and east coasts, where rents are more expensive. In San Jose, CA, a renter on a $2,000 budget can only afford a 537-square-foot apartment, the smallest among the most populous metro areas. Compared to Memphis, that’s a difference of more than 1,000 square feet.
Metros Where $2,000 Rents The Least Space (Square Feet)
|
All Apartments |
0-1 Bedroom |
2 Bedrooms |
3+ Bedrooms |
|
|
San Jose, CA |
537 |
491 |
596 |
630 |
|
San Francisco, CA |
565 |
520 |
634 |
No data |
|
New York, NY |
581 |
546 |
651 |
599 |
|
Los Angeles, CA |
591 |
549 |
648 |
661 |
|
San Diego, CA |
602 |
538 |
655 |
677 |
|
Boston, MA |
645 |
568 |
736 |
698 |
|
Seattle, WA |
732 |
640 |
875 |
976 |
|
Riverside, CA |
752 |
675 |
797 |
848 |
|
Providence, RI |
788 |
659 |
885 |
No data |
|
Miami, FL |
806 |
704 |
862 |
874 |
San Francisco (565 square feet), New York (581 square feet), Los Angeles (591 square feet) and San Diego (602 square feet) round out the five metros where $2,000 rents the least space.
To view the full report, including charts and additional metro-level insights, please visit: https://www.redfin.com/news/rent-ppsf-2024
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country’s #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email press@redfin.com. To view Redfin’s press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241210707324/en/
Contact Redfin
Redfin Journalist Services:
Kenneth Applewhaite
press@redfin.com
Source: Redfin
Released December 10, 2024
