Summary
A recent report detailed the cities in the United States with the most affordable rent. The report was compiled using data from the U.S. Department of Housing and Urban Development’s (HUD) 50th Percentile Rent Estimates and the U.S. Census Bureau’s American Community Survey (ACS), along with several other sources and analytics strategies. Factors such as the Housing Affordability Index, the effects of rent control, income levels, cost of living variations, and health-relevant factors of housing were taken into account.
The report found that Bismarck, North Dakota was the most affordable city for rent, with Sioux Falls, South Dakota ranked as the second most affordable. Other cities noted for their affordable rent included Cheyenne, Wyoming, Fargo, North Dakota, and Charleston, West Virginia among others. Despite these cities having lower rents, the report highlighted that rent affordability is closely tied to the strength of the job market and economic conditions, which can fluctuate.
This study underscores the importance of the ongoing issue of housing affordability in the United States. With millions of American households being cost-burdened and spending a significant portion of their income on housing, the availability and affordability of rent remains a critical concern. Factors such as increasing real estate values, inflation, and varying housing costs by city were found to influence housing affordability.
Despite the efforts made by rent control policies and federal rental assistance programs to alleviate the affordability crisis, critics argue these measures are not entirely effective and can have negative impacts. The report has generated debates on the effectiveness of current affordable housing strategies and pointed to the need for continued research and policy innovation.
Methodology Used in the Report
The methodology used in creating the report relied on multiple sources and data analytics strategies. Primary data used in this analysis came from the U.S. Department of Housing and Urban Development’s (HUD) 50th Percentile Rent Estimates and the U.S. Census Bureau’s American Community Survey (ACS). In order to establish the rankings, researchers evaluated changes in median rent prices from 2024 to 2025 across more than 350 metropolitan areas and all 50 states.
A significant component of the ranking criteria was the Housing Affordability Index, which was calculated as the blended annual housing cost divided by the blended median annual household income for each city. The annual housing cost was estimated using the median annual housing costs for homeowners with a mortgage, and the median annual gross rent, which may include utilities if paid by the tenants. The ratio of renters to homeowners with a mortgage was used to generate a blended annual housing cost for each metro area.
Rent prices were also adjusted for inflation using the Bureau of Labor Statistics’ Consumer Price Index. To address potential luxury bias in the rent data, researchers identified the last available list price before a unit was rented as a proxy for its transacted price, and benchmarked reported rent levels to representative median rent statistics from the Census Bureau’s ACS.
The effects of rent control were taken into consideration by examining a large number of empirical studies. Income levels and their volatility, as well as household net worth or wealth were included as important defining factors of economic well-being. The report also took into account the increased percentage of household income that renter households spent on gross rent from 2019 to 2021.
To account for variations in cost of living across different states, researchers used data from the Council for Community and Economic Research’s Cost of Living Index, along with the U.S. Bureau of Labor Statistics and the U.S. Census Bureau.
Finally, the report considered health-relevant factors of housing, termed the four pillars of housing, including conditions, cost, consistency, and context. Data related to these factors was derived from the U.S. Census Bureau’s detailed information on a range of topics, including marital status, births, education, immigration, migration, income, occupation, commuting and disability, as well as housing costs, type and value.
Most Affordable US Cities for Rent According to the Report
A recent report from WalletHub has ranked U.S. cities based on the affordability of their rent. The most affordable city for rent was found to be Bismarck, North Dakota, with a lower unemployment rate of 3.2%, compared to the national average of 4.2%. The median household income in Bismarck was reported to be $89,020.
Sioux Falls, South Dakota, was ranked as the second-most affordable city for rent, with a score of 96.64 out of 100. Other cities listed in the report as having affordable rent include Cheyenne, Wyoming, Fargo, North Dakota, Charleston, West Virginia, Casper, Wyoming, Overland Park, Kansas, Juneau, Alaska, and Anchorage, Alaska.
Furthermore, Pittsburgh was also highlighted as a city with affordable living costs. It was reported that the average apartment rent in Pittsburgh is 8% lower than the national average at $1,426 a month. Interestingly, the city was named the most affordable city in the country by the 2024 edition of the Demographia International Housing Affordability report.
Despite the affordable rents in these cities, it is important to note that the cost of rent is closely tied to the strength of the job market and the economy. In addition, changes in income have proven to be much more volatile than changes in rent. This suggests that the ability for Americans to afford rent can fluctuate based on economic conditions.
Factors Influencing Affordability in US Cities
Housing affordability is a significant issue in the United States, with the Urban Institute noting that for every 100 extremely low-income households, there are only 29 affordable apartments available. Research from the Harvard Joint Center for Housing Studies found that 38.9 million households are cost-burdened, paying more than 30% of their income towards housing. In 2020, 46% of American renters spent 30% or more of their income on housing, with 23% spending at least half their income on housing. The Department of Housing and Urban Development considers this to be “cost burdened”.
Affordability in U.S. cities is assessed by the Housing Affordability Index, which uses U.S. Census Bureau data to estimate annual housing costs. These costs include both the median annual housing costs for homeowners with a mortgage and the median annual gross rent, potentially including utilities if they are paid by the tenants. Despite the prevalence of new construction, many U.S. cities are experiencing an affordability crisis due to a variety of factors such as stagnant incomes, housing cost increases, and a slowdown in housing construction.
Rapidly increasing real estate values have also contributed to the affordability crisis, making homebuying inaccessible for many people. This has led to increased competition in rental markets. Inflation in the cost of materials, high interest rates, and labor market constraints have all hindered the development of new housing stock. Additionally, the rise in the Consumer Price Index, particularly for shelter, has significantly impacted affordability.
The affordability of housing also varies greatly by city. For instance, in the ten most affordable major U.S. cities, the median cost of rent can be as low as 15% of the median income, compared to more than 33% in the most expensive cities. The most affordable cities typically have lower unemployment rates than the national average, and include Bismarck, N.D., Sioux Falls, S.D., Cheyenne, Wyo., Fargo, N.D., Charleston, W. Va., Casper, Wyo., Overland Park, Kan., Juneau, Ala., and Anchorage, Ala.
Rent control policies have been implemented in some communities with the goal of preserving affordable housing. However, these policies have faced criticism and have been banned or restricted in some jurisdictions due to concerns about their effectiveness and potential negative impacts. To supplement these measures, the federal government has implemented tenant-based rental assistance programs, such as Housing Choice Vouchers, to subsidize housing costs in private rental housing. Despite these efforts, the affordability crisis persists, underscoring the need for continued research and policy innovation.
Impact of Rising Rents and Home Costs on Public Health
Rising rents and home costs are a significant issue in the global North, and they have had a profound impact on the availability of affordable housing. This issue, however, is not equally distributed across the United States. Recent data from the Department of Housing and Urban Development (HUD) shows that 12 states have median market rents exceeding $2,000 per month, up from nine states the previous year.
The trend of increasing rents is not a recent development; after a low of $257 in 1950, median gross rent rose to a high of $602 in 2000, more than double the rent in 1950 when adjusting for inflation. Gross rent includes the monthly amount of rent, plus the estimated average monthly cost of utilities such as electricity, gas, water, sewer, and fuels.
Given this context, there is an urgent need for cooperation between the public and private sectors to address this housing affordability crisis. Access to affordable housing is considered one of the four pillars of housing, along with housing quality, residential stability, and neighborhood opportunity. Housing affordability, or the lack thereof, impacts these other pillars as well.
In 2021, nearly half of Americans identified the availability of affordable housing as a major problem in their local communities, up 10 percentage points from 2018. This problem affects individuals and communities across the nation, regardless of state political leanings or city size. The unaffordability of housing is rooted in an acute shortage of homes available for rent or sale.
Unfortunately, only 1 in 4 households who are likely eligible for federal rental assistance receive it. This lack of support has negative consequences on individuals and communities. Research shows negative impacts on health, childhood well-being, employment, and housing stability for families struggling to afford their rent.
Comparative Analysis with Other Reports
The rent analysis presented in this report uses Apartment List data due to its public availability, commitment to methodological transparency, and usage of Census Bureau American Community Survey data to produce rent estimates that represent the entire rental market. A similar analysis was conducted by Pew Research Center, where Senior Researcher Rakesh Kochhar and Research Analyst Jesse Bennett made significant contributions. However, this analysis includes children as well as adults and relies on a separate government data source, leading to slightly different estimates of the overall shares in each income tier.
Further, the analysis conducted by researchers at Construction Coverage presents a comprehensive breakdown of rental prices across more than 350 metropolitan areas and all 50 states. It uses data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, adding another perspective to the comparative understanding of rent prices.
However, it is important to consider the changes in definitions of key socioeconomic categories and income questions over time. For example, the 2015 ASEC introduced a redesigned set of income questions, which may affect the comparability of data across different reports.
Criticisms and Controversies of the Report
Rent control, a key policy used to tackle affordable housing issues, has faced significant criticism in its effectiveness and methodology. Many economists universally argue that rent control is an example of the harm that governmental interference can have on the operation of a competitive market. Critics argue that rent control often benefits the privileged rather than the poor, as it inadvertently restricts supply and may lead to housing shortages.
Further, this report has sparked debates on the effectiveness of current affordable housing strategies. Targeted programs to subsidize the construction or rehabilitation of affordable housing, which are often used as complements to rent control, have been argued to be potentially effective in promoting housing affordability. However, this does not negate the need for the removal of inappropriate regulatory barriers to housing construction, which can also promote housing affordability for both renters and homeowners.
Moreover, the issue of inclusionary housing, where a portion of new housing must be affordable, is also brought into the spotlight. This measure, while aimed at increasing affordable housing, may also result in indirect consequences such as restrictions on new construction and further exacerbating housing shortages.
Finally, a study reviewing a large empirical literature investigating the impact of rent controls highlighted the need to analyze the policy’s socioeconomic and demographic impacts. This implies a criticism of the report’s methodology, suggesting that more comprehensive and nuanced metrics should be employed to fully assess the situation of affordable housing. The report’s reliance on rent control as the sole or primary measure of housing affordability may fail to capture the complexities of the issue and could potentially lead to misguided policy recommendations.
The content is provided by Blake Sterling, Scopewires
