In New York, rent has shot up 33% from pre-pandemic levels, and nationwide that figure is about 30%.
Rent prices have surged in recent years, outpacing wage growth in many areas. Although wages grew faster than rents nationally last year — and in nearly half of major U.S. metro areas — the opposite was true in New York City, where the largest gap emerged.
According to a new analysis from Zillow® and StreetEasy®, combined with wage data from the Bureau of Labor Statistics, U.S. rents have grown 1.5 times faster than wages since 2019. This is largely due to high demand from millennials and Gen Z adults, many of whom are renting longer than previous generations, coupled with a nationwide housing shortage that has driven rents up rapidly.
However, the national trend reversed slightly in 2022, with wage growth (4.3%) outpacing rent growth (3.4%). Strong multifamily construction helped meet demand for apartments, tempering rent increases in many parts of the country. But in New York City, rents rose more than seven times faster than wages across the five boroughs, creating the largest gap between rent growth (8.6%) and wage growth (1.2%) of any of the 50 largest U.S. metro areas.
"It's promising to see progress in the rental affordability crisis in much of the country, but New York City is heading in the wrong direction," said StreetEasy Senior Economist Kenny Lee. "Despite a robust job market, the gap between what renters can afford and what rentals cost is widening in New York. New multifamily buildings have eased competition in many areas, but construction in New York simply can't keep up with demand."
The slowdown in national rent growth has allowed wages to catch up somewhat, offering relief to renters in various markets. In 2022, rents fell in cities like Austin, Portland, and San Francisco, while wages continued to rise. In 20 other metros, wages outpaced rent growth, giving renters some breathing room.
Florida markets, however, have seen the most dramatic disparity between rent and wage growth over the past five years, with three of the top five spots in the U.S. Rent prices in the state have skyrocketed due to a surge in new residents drawn by the pandemic-era appeal of year-round outdoor living and relatively affordable housing compared to other coastal markets. Even in Miami, where wage growth has slightly exceeded the national average, rents have surged nearly 53% — the highest jump in the U.S. — creating a significant gap between earnings and the cost of typical rentals.
In contrast, wages have consistently outpaced rent growth in just six major metro areas in recent years, with the largest gaps observed in San Francisco, San Jose, and Houston.
