New York City rents grew seven times faster than wages last year, tightening affordability crunch

SEATTLE, May 7, 2024

• Since 2019, U.S. rents have grown 30.4%, while wages have grown 20.2%. Rents have outpaced wages in 44 of the 50 largest U.S. metro areas.
• Wages caught up last year nationally and in about half of major metros.
• In New York City, rents grew more than seven times faster than wages last year — the largest gap in the country.

SEATTLE, May 7, 2024 /PRNewswire/ -- Rent prices have surged in recent years, and wages have not kept pace. While last year was a bright spot — wages grew faster than rents nationally and in almost half of major U.S. metro areas — the opposite was true in New York City, where the nation's largest gap emerged.

Since 2019, U.S. rents have grown 1.5 times faster than wages, according to a new analysis of rental data from Zillow® and StreetEasy®, along with wage data from the Bureau of Labor Statistics.¹ Demand for rentals from the large millennial generation — many of whose members have remained renters longer than previous cohorts — and Gen Z adults has run headlong into the country's housing shortage, causing rents to quickly rise.

That trend cooled last year, as national rent growth (3.4%) was outpaced by wage growth (4.3%). Strong multifamily construction has helped absorb demand for apartments, keeping rent growth in check in much of the country. But rents grew more than seven times faster than wages across New York City's five boroughs last year. That gap between rent growth (8.6%) and wage growth (1.2%) in New York City was larger than in any of the 50 biggest U.S. metro areas.

"It is encouraging to see much of the country making even modest progress in the rental affordability crisis. Unfortunately, New York City is heading in the opposite direction," said StreetEasy Senior Economist Kenny Lee. "Despite a strong job market in the city, and in some ways because of it, the gap between what a typical renter can afford and the price of rentals on the market is growing. New multifamily buildings coming online has eased competitive pressure in many markets, but in New York City, construction just simply can't keep up with demand."

Moderating rent growth across the country has given wages a chance to catch up, providing a reprieve for renters in many markets. Rents dipped in three markets last year — Austin; Portland, Oregon; and San Francisco — while wages continued to grow. In 20 other metros, rents grew, but wages grew faster, giving renters some breathing room.