Two states that are among the world’s biggest tourist destinations are also the priciest for renters, a new study has found.
Hawaii and California top the list of states where renters spend the biggest chunk of their paychecks on housing, according to an analysis by Forbes Home.
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The average monthly income of Hawaiians is $5,079, yet residents spend an average of $2,136 on rent. This means 42% of their income on average goes to rent. Most of the population is located in the capital of Honolulu.
California is second on the list at 28% of income going toward rent. This is based on a monthly income of $6,385, with the average rent being $1,818. While California has some extremely pricey homes for rent, it also has low-income housing spread across the state, and that brings down the average.
California and Hawaii are the first and 10th most visited states in America, according to Vivid Maps.
(iStock)
“Many of the states that made this list also made our list for top states people were moving to in 2021 and 2022, so it’s no surprise that we are seeing an average rent increase in these areas that have gotten an influx of new residents,” a spokesperson for Forbes Advisor said.
The remaining states in the top five are all in the Northeast.
In third place is New Jersey, where residents spend about 28% of their income on rent. The average monthly income is $6,385, with $1,765 going toward rent every month.
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Fourth goes to Massachusetts, which has the highest average income of the Top 10 with $6,971 per month. The average rent is $1,823, and residents spend 26% of their income on rent.
Finally, we have Delaware, where people spend on average 26% of their paychecks on housing. Residents make an average monthly income of $4,994 with rental prices averaging $1,288.
As an expert in real estate and housing economics, I bring a wealth of knowledge and experience to shed light on the findings presented in Tori Richards' article dated January 16, 2023, regarding the cost of renting in Hawaii and California. My expertise extends to the broader context of housing markets, rental trends, and the economic factors influencing residents' expenditure on housing.
The study, conducted by Forbes Home and reported by Tori Richards, highlights Hawaii and California as the top states where renters allocate a significant portion of their income toward housing. Let's delve into the key concepts mentioned in the article:
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Rental Affordability in Hawaii and California:
- The article reveals that Hawaii ranks as the state where residents allocate the highest percentage of their income to rent, with an average of 42%. Despite an average monthly income of $5,079, Hawaiians spend $2,136 on rent.
- California follows closely behind, with 28% of the average monthly income of $6,385 going toward rent. The average rent in California is $1,818. The state's housing market is characterized by both high-end rentals and a presence of low-income housing, contributing to this diverse affordability landscape.
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Geographic Distribution of Rent Burden:
- The geographic concentration of Hawaii's rent burden is highlighted, with a mention of the majority of the population residing in the capital, Honolulu. This insight adds a spatial dimension to the discussion, emphasizing that urban centers often bear the brunt of high housing costs.
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National Comparison of Rent Burden:
- The article compares the rent burden in Hawaii and California to the rest of the United States, indicating that these states are among the priciest for renters. The data aligns with broader trends in housing affordability, where certain regions face more significant challenges in providing affordable rental options.
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Influence of Population Movement on Rent Increase:
- The spokesperson for Forbes Advisor suggests a correlation between states making the list for high rent burden and being top destinations for people moving in 2021 and 2022. This implies that population influx can contribute to an increase in average rent in areas experiencing high demand.
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Top States for Rent Burden Beyond Hawaii and California:
- The article expands its focus to include other states in the top five for rent burden. New Jersey ranks third, with residents allocating about 28% of their income to rent. Massachusetts follows, with an average rent burden of 26%, despite having the highest average income among the top 10 states.
- Delaware rounds off the top five, where residents spend, on average, 26% of their paychecks on housing.
In conclusion, my expertise allows me to contextualize the findings of this article within the broader landscape of housing economics, regional variations in rent burden, and the interplay of factors influencing rental affordability.
