Navigating today's challenging rental markets

The U.S. rental market is keeping people from buying homes

We recently shared information on Housing market predictions for 2024. This included some predictions for both real estate purchase and rental markets across the U.S. But there was a big Catch-22 when it comes to “rent versus buy”. While many people are experiencing high priced housing markets where they cannot afford to buy, they continue to pay an increasing percentage of salary towards renting, in effect, making it even more challenging to purchase and keeping them as renters even longer. 

Renting is more unaffordable than ever

Half of Americans feel that affordable housing is a major problem in their area. With just over a third (34%) of Americans renting, over half of them are already paying more than 30% of their income — the standard threshold indicating that there’s an affordability crisis. Per this CNN Business article (Here’s why it’s so hard to find an affordable apartment to rent), beyond the cost, in many places it is hard to even find apartments to rent, especially in dense Northeastern cities like New York and Boston, where building new housing is very difficult. “In cities like these, just the expense of securing an apartment can cost thousands of dollars, even before the rent comes into play.” In cities like New York, a renter typically pays $10,000 to find and secure an apartment, up nearly 30% from before the pandemic, according to research from StreetEasy.

Considering the most unaffordable locations

In this Visual Capitalist article, joining Boston and Miami in the most unaffordable cities is Chula Vista in California, where exactly one in 10 rental listings could be classified as affordable. That’s fewer than New York’s results (11.63%). California has four of the top 20 most unaffordable cities for renters, and ranks fifth in the list of states by income inequality. In the data they share from CashnetUSA, here are the least affordable locations across the U.S. to rent:

1. Miami, FL
2. Cambridge, MA
3. Boston, MA
4. Chula Vista, CA
5. Gilbert, AZ
6. North Las Vegas, NV
7. New York, NY
8. Santa Ana, CA
9. Savannah, GA
10. San Diego, CA

Click here to see the image in full size of the complete list.

Less support is impacting many renters

Per our friends at ReloNetworkAsia, in 2023, there was a significant rise in demand for one-day standalone destination services, particularly in home-finding assistance. This demand for one-day services has more than doubled over the past three years. While the surge can be attributed to a variety of factors, this shift has created challenges in supporting mobile employees and is impacting the employee experience. Their white paper was a collaborative effort, and many of our partners worked with them to present the data and insights. While they work in many non-US locations around the world, we can confirm similarly that many companies, particularly at lower employee levels, only provide one day of rental support for relocations. Realistically, many locations will take much longer than this for the employee to locate and find affordable housing. As the report points out, "The mismatch between the time it takes to deliver a Home Search (rental) service and the current trend of standalone-one day Home Search (rental) relocation benefit poses challenges in setting and managing expectations." Check out their white paper, “One Day DSP Programs Myths and Realities”, which explores the situation and provides some ideas on solving for the challenges of balancing costs and experience.