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Rental rates soaring in summer months
Inflation isn’t just impacting gas prices as rent prices continue to soar this summer.
LOS ANGELES - Californians are no stranger to skyrocketing prices when it comes to pretty much anything - gas prices, housing, food - the list goes on.
A recent analysis conducted by SmartAsset reviewed the nation’s 25 largest cities to determine the number of hours a renter would need to work to cover housing costs. The methodology was based on three factors - average annual take-home pay, average hours worked per year, and median monthly rent.
Four California cities made the list, with San Jose taking the top spot. Workers there need to work the most to pay rent, with 77 hours needed to pay a median monthly rent of $2,232.
Los Angeles came in second. Workers here need to work 72.3 hours to pay for rent each month. The average rent was estimated at $1,523 with the average wage at $21.08.
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SoCal rent prices have skyrocketed in the last year
Rising home prices are pushing up the price of rent too. Experts say the U.S. has seen an increase of a half percent in rent prices per month, the largest increase in 20 years.
Trailing behind for third place was San Diego, where working 72.2 hours with a wage of $24.53 would be needed to afford an average rent of $1,770.
Rounding out the top four cities in the Golden State was San Francisco. The estimated hourly wage is higher than the three other California cities at $31.74, but the median rent exceeds $2,000, meaning you'd need to work 63.3 hours to pay rent.
You may have heard of a common financial rule of thumb - spend no more than 30% of your pre-tax income on housing.
Based on SmartAsset’s data, here is an estimate of how much of an average renter’s income is going to housing:
- San Jose: 48%
- Los Angeles: 45%
- San Diego: 45%
- San Francisco: 40%
Unsurprisingly, the above four cities were also found with the highest median home list prices according to recent data from Zillow.
On average, 56 work hours are needed to afford rent across the largest 25 cities.
Detroit, Michigan is the only city where a single full-time work week could pay for a month of rent. The median monthly rent in Detroit is $850 and the average employee earns about $20 per hour after taxes.
You can read the full report by tapping or clicking here.