(Nexstar) — It’s long been understood that big-city living can come at a high price, especially in California. If you’re planning to move to one of the state’s largest cities, you’ll want to make sure your paycheck can cover it.
According to Realtor.com, renters in the nation’s largest cities pay an average of $1,759 per month. September Rental Report. That’s down about $20 from July and slightly below the average 1-bedroom in California’s population centers.
Even as rates cool, rent remains high in some California cities, adding to already-inflationary pressures.
Housing and Urban Development Department, as well as many financial advisors, Recommend Following a financial plan that keeps your rent-to-income ratio below 30%. If you earn $100 a month, you only need to spend $33 on your housing costs.
Using that ratio, a financial technology firm Smart Asset Renters living in the nation’s 25 largest cities calculated how much they would need to earn to afford an average one-bedroom and two-bedroom apartment.
To determine the average annual income needed to afford the median rental rates for both sizes of apartments, SmartAsset used a 28% rent-to-income ratio, slightly lower than HUD’s recommendation to allow more wiggle room in the example budget. Cities are ranked based on how much renters need to earn to afford the average two-bedroom apartment.
Surprisingly, SmartAsset found that cities in California require renters to earn at the highest income levels to purchase apartments. In San Francisco, Los Angeles and San Jose, where rent for one or both of the apartment options reviewed is above $3,000 per month, renters must earn six-figure incomes to meet the 28% ratio.
The four California cities that appeared on SmartAsset’s list all ranked in the top 10 most expensive, with average rents for each city falling between $2,300 and $2,900.
Here’s how cities ranked in SmartAsset’s report included:
|Overall rank||the city||Income for 1-bedroom||Income for 2-bedroom|
New York, Boston, District of Columbia, Seattle, Denver and Chicago are the other cities that made the top 10. In more affordable cities, four renters can afford the average apartment with an income of less than $50,000. Smart Asset. Those cities are Columbus, Ohio; Indianapolis; Detroit; and El Paso, Texas.
According to a recent report from Rent.com, rents in many California cities are surprisingly, are increasing From last year.