U.S. Apartment Rental Market Affordability Gaps Grow

The U.S. rental housing market in 2025 continues to reflect mounting affordability concerns and shifting regional dynamics, according to new data from Experian and RentSpree. While national rent growth has softened somewhat, cost burdens remain historically high and are being exacerbated by uneven regional trends and broader economic forces.

Nationally, renters now spend an average of nearly 47 percent of their income on rent, far exceeding the 30 percent affordability benchmark set by the U.S. Department of Housing and Urban Development. Among low- to moderate-income households that make up 62 percent of the renting population, the rent burden is even more acute, with about 55 percent of income going toward housing. Meanwhile, the average renter income has declined slightly to $51,600.

California remains one of the most cost-burdened states in the country. The state has the highest rent-to-income ratio at more than 56 percent. RentSpree data shows that month-over-month median rent in California rose 2.6 percent in May to $3,900, indicating that affordability challenges persist.

In contrast, Florida has seen a median rent decline of 11 percent in May to $2,500, but this softening hasn’t occurred evenly. RentSpree data shows the highest rent category jumped nearly 6 percent to $9,000, underscoring continued demand for luxury rentals in high-growth areas. 

In Texas, increased housing supply has relieved some pressure as median rent in May declined to $1,800 and maximum rent prices dropped 4 percent to $8,800, according to RentSpree.

At the same time, dynamics in the for-sale market are beginning to intersect more directly with rental trends. A surge in homes for sale could soon impact rental conditions across the U.S. as there currently are about 500,000 more home sellers than buyers nationwide, according to a Redfin report. Therefore, some homeowners, unable to sell at desired prices, may opt to rent out their properties instead. This could increase rental inventory in coming months and soften demand in the rental market, particularly in cities with high for-sale supply, and bring modest price relief for renters.

Despite the increase in for-sale inventory, it is unlikely that a significant number of renters will turn to home ownership. Home prices have soared over the past years to an average of about $417,000 as of the first quarter of this year. To keep housing expenses at no more than 30 percent of the median U.S. household income (about $80,600), the interest rate on a 30-year fixed mortgage would need to be much closer to 4 percent, and not the current 7 percent, to be affordable. Factoring in additional fixed costs such as taxes and insurance, the rate would need to be even lower to stay under this affordability threshold. 

Looking ahead, in spite of affordability challenges that impact both sectors of the housing market, the rental segment is poised to grow not just in size, but in long-term significance. Regardless of what happens in the for-sale realm, including shifts in interest rates or fluctuations in inventory, homeownership remains financially out of reach for a large and growing portion of the population. 

As of 2023, the median U.S. home costs nearly six times the median household income, almost double the delta seen in the 1980s. In major metros, that gap is even more extreme. This affordability chasm has fundamentally reshaped the housing landscape, and will continue to do so for years to come, making rentals no longer a short-term stopgap for many in the U.S., but a long-term or even permanent housing solution. 

Michael Lucarelli is the CEO and co-founder of RentSpree.