After years of national increases, some key metropolitan areas are enjoying lower rent prices this year.
Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…
The interesting study
The finance experts at GoBankingRates.com evaluated rent price increases and decreases nationwide. GoBankingRates conducts this study each year. In past years, the results haven’t exactly been good for families living on a tight budget. For instance, last year showed median rent levels on 1-bedroom exceeded what many households could afford.
The big result
Finally, this year we see rent prices in several key metropolitan areas have actually decreased. These days, most families are accustomed to their landlord telling them rent went up again. So, finding out that your rent might be lower may be a big relief for your budget.
These are the top 15 cities that enjoyed rent price decreases this year:
- Bronxville, New York: $475
- Buffalo, New York: $355
- San Francisco, California: $226
- Walnut Creek, California: $225
- Danbury, Connecticut: $217
- Newport Beach, California: $202.50
- West Hollywood, California: $144.50
- Fort Collins, Colorado: $130
- North Bay Village, Florida: $126.50
- Grand Prairie, Texas: $106
- New Haven, Connecticut: $100
- Providence, Rhode Island: $100
- Oakland, California: $100
- El Paso, Texas: $95
- Long Beach, California: $87.50
The fascinating details
Although rent in those 15 areas decreased, it doesn’t mean that living in those cities is affordable now. Take San Francisco, which has one of the highest cost of living standards in the nation. While rent dropped by $226 this year, that doesn’t return prices to where they were in 2015 when rent increased by 15% in a single year. So, the $3,374 average rent this year is an improvement over last year’s $3,600. However, most families would hardly call that affordable.
Still, it’s a good sign that prices are finally dropping anywhere. If you’ve watched prices over the past few years, you might have assumed they’d just continue to rise. And there are some places where that continues to be true.
These are the 15 cities where average rent price increased the most this year:
- Marina del Ray, California: $441.50
- Medford, Oregon: $405
- Jersey City, New Jersey: $285
- Columbia, South Carolina: $277
- Corona, California: $273.50
- Euless, Texas: $254
- Phoenix, Arizona: $234.50
- Foster City, California: $227
- Newark, New Jersey: $220
- Chula Vista, California: $219.50
- Savannah, Georgia: $214
- Tacoma, Washington: $209
- El Cajon, California: $207.50
- East Orange, New Jersey: $205
- Delray Beach, Florida: $205
What you can do
“In general, housing costs should make up about one third of the average household budget,” explains April Lewis-Parks, Financial Education Director for Consolidated Credit. “However, if you live somewhere like San Francisco, housing can easily drain more half of your income. For most households, that’s just too much. So, you need to consider carefully where you live. A different suburb could offer much greater affordability.”
Consider the Bay Area. Both San Francisco and Oakland made the rental price decrease list. However, median rent in San Francisco remains high at $3,374 while median rent in Oakland in only $2,150. That’s a difference of $1,224 per month and $14,688 annually. That gives you more than enough savings to cover increased transportation costs from a longer commute.
Of course, you also need to carefully consider your household’s needs and lifestyle before you make a move. A crime-infested area may have lower rent prices, but it’s not exactly a good place to raise kids. Moving farther out of the urban center generally decreases the rent price you pay. However, a two-hour commute each way isn’t a sustainable lifestyle for most people.
Consolidated Credit offers these renter tips:
- Check sites like GoBankingRates and Zillow to find median rent prices in your area.
- If you pay more than that and don’t get any extra amenities for it, consider moving once your rental agreement is up.
- Additionally, if the median rent in your area is too high for your budget, start looking at other neighborhoods around you. You’d be surprised at how much a few miles can affect prices.
- If you plan to move further out of the city, make sure to factor in things like added fuel costs to commute to work; you should also consider things like how far you need to travel for restaurants, entertainment and shopping.
For more information on how to factor in various costs in your budget, visit Consolidated Credit’s Budgeting Made Easy Guide.