If given the chance, you would probably be willing to upgrade the apartment or home you are renting right? It’s fair to say that people tend to want to get the nicest dwelling they can. However, the rental market does not always lend itself to this dream. Whenever you move, one of your first steps should be drawing up a budget. Yes, a huge expense will be your rent, but it is important to be realistic in your leasing options. While ultimately your decision, it is suggested that no more than 30% of your income be put toward rent. This may sound like a lot, but depending on your salary and where you will be living, this might not go as far as you think.
According to census data, the median gross rent in the United States is $959 per month. This includes values from all 50 states in addition to Washington D.C. and Puerto Rico. The lowest rent per month was in Puerto Rico at $433. This was followed by West Virginia and South Dakota, which each had median rents of $675 per month. Hawaii had the highest rent per month at $1500. Illinois ranked as the 19th most expensive state at $936 per month. This may not seem like much, after all it is lower than the national average, but this is an aggregated value. It can be deceiving when combining all the rates throughout a state. A better indicator can be analyzing household income in comparison to rent.
The median household income in the United States is $55,775. The same rules of the rent data apply here: the median value is achieved by aggregating all the other values. For instance, Puerto Rico had the lowest annual HHI, $18,626. Mississippi residents had the second lowest median income at $40,593. While still well below the national average, Mississippi’s HHI dwarfs Puerto Rico’s in comparison. Maryland residents made the most with an median HHI of $75,847. Out of all fifty states and Washington D.C. and Puerto Rico, Illinois ranked 19th in the nation on income with $59,588 annually.
So what does all this mean? It means that we are able to break down by state the median percentage of household income that is spent on rent for each state. The map below displays the median percentage of HHI that went towards rent. While many states seem to be abiding by the 30% or less rule, some are not. While not displayed on this map, Puerto Rico spends the most on rent as a percentage of income. 34% of income goes to rental expenses in the commonwealth. Florida and Hawaii also overspend on rent, at 33.6% and 33.5% of HHI respectively. Illinois ranked 22nd in the most spent on rent. While in the upper half of states, Illinoisans still meet the 30% cutoff, spending 29.7% on rent. The residents of North Dakota win the rent race. They spend a mere 24.7% of HHI on rent.
As you shop for an apartment or home keep your budget in mind. Sure, that penthouse suite might be everything you’ve dreamed of, but how much will you have to shell out to get it? Be realistic in your budget and don’t find yourself in a bind spending too much on rent. Work hard, save up, and maybe you’ll find yourself being able to upgrade after all.