It's a renter's nation these days! According to the most recent data from the National Multifamily Housing Council, a whopping 44.1 million U.S. households are choosing the flexibility and affordability of renting over owning a home. That's more renters than any point going all the way back to 1965.
Why the big switch? Well, soaring home prices and rising interest rates have made the road to homeownership increasingly steep for the average American. This financial landscape has led many to reconsider this traditional milestone of financial success, with renting emerging as a more viable option for a growing segment of the population. The recent return of student loan payments has further tightened budgets, prompting many to reevaluate how their housing needs fit into their budgets.
Against this backdrop, many personal finance experts are advising a return to the "30% rule," which suggests spending no more than 30% of gross income on housing (rent or mortgage). This guideline helps ensure you're not overburdened by housing payments, preserving income for other living expenses and savings. It can even help you put away money for an eventual down payment on your first home.
Not sure if you're abiding by the 30% rule? First, take your gross annual income and divide it by 12 to find your monthly gross income. Then multiply that number by 0.3 to find the maximum you should be spending on housing. If you're currently paying more than that each month for your current living space, it's probably time to consider seeking a more affordable roof over your head.
And if there's nothing affordable in your city, you're not alone. Despite its simplicity, sticking to this rule can be challenging - especially for those living in high-cost urban areas.
A Shift to Affordability: Top Cities for Renters
Fortunately, there are still plenty of locales that offer affordable rents for those seeking refuge from high cost-of-living markets. The following cities represent the best of low-cost living, where the average rent takes up only a modest slice of the median household income and vibrant communities offer unique perks to their residents.
So, if your bank account's begging for a break, we've got the lowdown on the cities where your rental dollar stretches the furthest. Let's dive into the five wallet-friendly cities renters need to check out.
1. Fargo, North Dakota: A Hidden Gem in the Upper Midwest
Big fan of the Coen Brothers? Or snow? Look no further than Fargo, North Dakota, where the median monthly rent is $841. The local median household income is $60,243, so the typical resident spends less than 17% of their income on rent. It’s an agricultural and educational hub, with booming healthcare and technology sectors.
But Fargo offers more than its chilly reputation; it’s home to a surprisingly vibrant cultural scene, with an array of theaters and galleries. The 11 local universities bring a youthful energy to the city, while the community spirit makes it an incredibly welcoming place to call home. In Fargo, life is about community, resilience, and a quality of life that’s tough to beat for the price. Darn tootin'!
2. Wichita, Kansas: The Heartland’s Best-Kept Secret
In the heart of America, Wichita, Kansas, stands out with a median rent of just $856. If we compare that to the city’s median household income of $56,374, the average renter in Wichita is spending only 18% of their budget on housing.
Wichita is a place where the job market is as varied as the local culture, boasting strong sectors in aerospace, healthcare, and manufacturing. But there's more to life than just work and home, and Wichita has plenty to offer. It’s a cultural hub where the skies are big, and the community feeling is even bigger. From theaters to museums and ample parks, Wichita offers a quality of life that’s hard to match. It’s a place where the living is easy, the neighbors are friendly, and your paycheck stretches further than you might have thought possible.
3. Corpus Christi, Texas: A Beach Town With a Modest Price Tag
Looking to relax by the beach on your days off? Check out Corpus Christi, Texas, a coastal city that comes with a median monthly rent payment of $1,099. Based on the median household income of $59,993, the typical resident here commits just under 22% of their income to rent. It’s a paradise for beach lovers and a hotspot for the petrochemical and maritime industries, as well as a hub for healthcare and education professionals.
Imagine spending your days off strolling along the bay-front promenade or exploring the Texas State Aquarium. Corpus Christi truly combines the allure of coastal living with the practicality of a city that knows how to work and play hard.
4. Toledo, Ohio: The Glass City with a Crystal-Clear Value
Over in Toledo, Ohio, the median rent payment sits at just $781. With a median household income of $41,671, the typical resident shells out 22.5% of their income on rent.
What’s the draw of Toledo? It’s a haven for those in healthcare, education, and manufacturing, proving that this old glass-making giant still has plenty of modern sparkle. Living in Toledo offers a blend of urban buzz and lakeside tranquility, where you can enjoy the world-class Toledo Museum of Art and the famous Toledo Zoo, as well as close proximity to the stunning Great Lakes. This city proves you don’t need to spend big to live large.
5. Memphis, Tennessee: A City Filled With Soul and Savings
In Memphis, Tennessee, renters shell out a median monthly payment of $965 to live near the birthplace of Rock 'n' Roll. The median household income sits at $43,981, which means rent accounts for roughly 26% of income.
Memphis offers music, legendary barbecue, and so much more. The FedEx (FDX) host city thrives on logistics, medicine, and manufacturing, offering robust job markets alongside its rich cultural tapestry. Elvis's Graceland, Beale Street's blues, and the National Civil Rights Museum offer depth to your weekends. In Memphis, you’ll find a community where history is celebrated, the cost of living is low, and every corner has a story.
Each of these cities is a testament to the fact that renting doesn’t have to mean compromising your quality of life. In fact, these communities offer vibrant living at a cost that’s easy on your wallet, proving it really is possible to have your cake and eat it, too. With an ever-growing number of renters in the U.S., these five cities are shining examples of value meeting lifestyle, where the American Dream is still alive and well — and rented.
On the date of publication, Meredith Margrave did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
