Rents have surged in recent years, and wages have not kept pace, though last year workers made some gains.
Pay in 2023 grew faster than rents nationally and in almost half of major U.S. metro areas – but not in San Diego.
While other California markets, including Los Angeles, Riverside and San Francisco, saw enough of a wage gain for workers in 2023 to overtake the rise in rental costs, local renters still faced a gap, according to an analysis by Zillow.com and StreetEasy.
Over the period from 2019-23, rents in San Diego climbed 36.6%, while wages rose just under 19%. If the data is isolated to 2023 alone, rents rose 3.1% as wage growth trailed at 1.4%.
Nationally, since 2019, 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.
In California and the West the numbers show that:
- Los Angeles – Rents rose 22.2% as wages grew 17.2%
- Riverside – Rents rose 41.4% as wages grew 23.3%
- Sacramento –Rents rose 28.6% as wages grew 16.2%
- Phoenix – Rents rose 39.1% as wages grew 16.6%
- Las Vegas – Rents rose 34.3% as wages grew 14.4%
The gap is most pronounced In New York City, where rents grew more than seven times faster than wages last year – 8.6% to 1.2%.
Wages have consistently outpaced rents in recent years in only six major metros.
“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.