Sunnyvale, California, is home to a population of over 150,000 people and boasts numerous parks, the presence of a Google campus, work opportunities at Lockheed Martin, and serves as the headquarters of the job search and networking platform LinkedIn. According to a recent analysis from RentCafe, renters in Sunnyvale can stretch their dollars the furthest compared to 189 other locations.
RentCafe calculated a financial balance score for 189 US cities, factoring in various expenses such as healthcare, transportation, and food, in addition to rent. The analysis considered income based on Census Bureau data and rental costs based on Yardi Matrix research, while other expenses were drawn from the Council for Community and Economic Research.
By computing the disposable income remaining after paying monthly rent, the ratios between income and the total cost for each category were determined. The weighted category scores were then summed to establish the overall score, with the income-to-rent ratio carrying the most significant weight. This comprehensive analysis supported the ranking of cities based on their financial balance.
The data, including each city's overall score, was made available by RentCafe and shared with Business Insider, enabling a detailed comparison between cities.
As seen in the chart, looking just at monthly renter household income compared to monthly rent and basic necessities together, many of the places looked at had ratios around 1. That is, incomes weren't too far off from expenses.
RentCafe found Athens, Georgia; New Orleans; Albany, New York; and Gainesville, Florida, had some of the lower scores among the places examined. They all had scores that were less than 18, meaning they are among the locations where renters might not be able to get a lot out of their income.
Auburn, Alabama, had a score far lower than the other places, with a score of 1.59. Its monthly income was $1,880. Rent and the various expenses together had a value of $2,585 for this location.
While Sunnyvale didn't have the largest monthly rent and basic necessities value together, it did have the highest monthly renter household income among the 189 US cities part of the analysis. Its monthly income was more than $12,000. Its rent is around a quarter of that, at around $3,000 a month per the blog post.
The post from RentCafe writer Alexandra Both that highlighted the analysis stated that "in the heart of Silicon Valley, renters had the highest annual wages in the country — triple the nation's median income." The post noted $49,201 as the median for renters.
Meanwhile, Both wrote that "Boston had similar prices for basic necessities" as well as "a slightly higher monthly rent" than Sunnyvale. However, Both added, "its lower annual income of just less than $61,000 would make budgeting more challenging for renters." Boston's score based on the methodology was 8.85.
Manhattan had the largest monthly rent plus basic necessities value but ended up having one of the lower scores, at 14.73. Its monthly renter household income was only around a $500 difference from rent and basic necessities analyzed or $6,477 compared to $5,965.
Based on the scores calculated using income, rent, and expenses data, three of the top 15 cities where income can go far were in Texas, with scores near or over 60.0. Two of the top 5 cities were in Virginia, with scores not too far from or greater than 70.0.
What the rental market looks like and may look like this year
Meanwhile, Ressler noted the attractiveness of city hubs is partly behind why there could be a lot of the supply coming from those areas.
"The coastal cities, the gateway cities have always been hubs for greater density," Ressler said. "With greater density, you have more population, you have more population demand for supply of rental housing."
Overall, Ressler said "the rental market is continuing to be dynamic" and renters could see some relief as new buildings come online.
"What we're seeing in most of the major cities is a deceleration of rent," Ressler said, adding this "is based on the incoming new supply."
"We also anticipate that there will be concessions that are being offered in most major markets to retain renters because there's also a cost of replacing a renter once they've moved out," Ressler said.
Outside of renting, people eager to close on a home may be finding it hard to find affordable options. Ressler said there's been years of "inadequate, affordable housing stock" available to buy.
"It will take another decade to try and work our way out of providing housing stock for folks to be able to buy and purchase their own homes," Ressler said if this continues to occur.
Ressler's advice for renters in general is to make sure to do research in three main categories: live, work, and play. For instance, aspiring renters might need to think about parking and transportation access where they want to rent.