Renting has always been a balancing act between affordability and opportunity. For many Americans, the decision of where to live isn’t just about location or lifestyle it’s about how much of their paycheck will be eaten up by rent each month. In 2025, that balance has tipped dramatically in some states, forcing renters to dedicate nearly half of their income to housing.
New data from WalletHub, reported by Quartz, uncovers the stark divide: in the priciest states, renters are paying more than 50% of their income just to keep a roof overhead, while in the cheapest, housing takes up less than 20%.
Full source: Quartz article
The National Housing Crunch
Economists often use the “30% rule” as a benchmark: if you spend more than 30% of your income on rent, you’re considered rent-burdened. But in today’s housing market, that threshold feels more like a luxury. Millions of renters especially in states like New York, Hawaii, and Massachusetts are spending closer to half of their income on rent.
This isn’t just a financial inconvenience; it’s a structural issue with ripple effects:
-
Families have less money for healthcare, childcare, and education.
-
Savings and retirement planning are pushed aside.
-
Renters are more vulnerable to debt and unexpected emergencies.
On the other side of the spectrum, states like Kansas, Iowa, and Wyoming still offer relative breathing room, with rent consuming less than 20% of incomes. These renters may find it easier to save, invest, or plan for the future luxuries many in coastal or high-demand states cannot afford.
The Most Rent-Burdened States in 2025
According to WalletHub’s ranking, here are the states where renters are struggling the most:
-
New York – 54.52% of income
The Empire State leads the pack, with renters especially in New York City spending over half of their household income on rent. High demand, limited housing supply, and persistent wage stagnation all fuel the crisis. -
Hawaii – 52.88%
Paradise comes with a price tag. Hawaii’s limited land and heavy reliance on imports drive up costs, leaving renters shouldering some of the heaviest burdens nationwide. -
Massachusetts – 48.78%
With Boston’s booming job market and top universities, demand is sky-high. But wages haven’t kept up, and affordable housing is scarce. -
Florida – 42.64%
Once considered more affordable, Florida’s housing market has exploded. Migration, tourism, and a surge in property investment have pushed renters into tough situations. -
Maine – 41.78%
A surprising entry, Maine reflects the Northeast’s growing affordability crisis. Once a quiet rental market, it now faces pressures from migration and limited housing development.
The Most Affordable States for Renters
Meanwhile, some states remain comparatively affordable, offering relief for renters:
-
Kansas – 19.11% of income
The Sunflower State tops affordability rankings. Renters here can enjoy more financial stability and even put money aside for savings or homeownership. -
Iowa – 19.32%
Another Midwestern state where incomes stretch further. With steady job markets and modest housing costs, renters get more value. -
Wyoming – 19.64%
Wide-open spaces, small populations, and relatively stable housing markets keep rent affordable. -
Minnesota – 21.11%
A combination of strong incomes and manageable housing prices makes Minnesota a standout in the Midwest. -
Oklahoma – 21.63%
The South isn’t all expensive. Oklahoma’s lower cost of living provides renters with breathing room that’s hard to find in coastal markets.
Why Such a Stark Divide?
Several factors explain the affordability gap:
-
Supply and Demand: Urban and coastal states simply don’t have enough housing for the people who want to live there.
-
Wage Growth vs. Rent Growth: In many expensive states, wages haven’t kept up with rapid rent increases.
-
Population Shifts: States like Florida have seen huge population booms, outpacing housing construction.
-
Policy Differences: Rent control, zoning laws, and incentives for new housing vary dramatically across states.
-
Geography and Land Costs: Limited land in places like Hawaii or dense metro areas like New York keeps housing costs high.
Regional Realities: Living Beyond the Numbers
Rent isn’t just about dollars it’s about lifestyle and opportunity.
-
High-cost states (New York, Hawaii, Massachusetts): Renters often live with roommates longer, delay starting families, or compromise on location and commute times. Financial stress becomes a daily reality.
-
Affordable states (Kansas, Iowa, Oklahoma): Renters have more discretionary income. They can afford vacations, invest in retirement, or even transition to homeownership earlier.
For many, the trade-off is about choosing opportunity vs. affordability. High-cost states offer more jobs and amenities, but at a crushing financial cost. Affordable states offer stability but may lack the same level of career growth or cultural opportunities.
Historical Perspective
The U.S. rental market hasn’t always looked this dire. Over the past decade:
-
2010–2015: Rent growth was steady, but incomes caught up in many regions.
-
2016–2019: A wave of migration to Sunbelt states kept some markets balanced, but affordability gaps began widening.
-
2020–2021 (Pandemic years): Eviction moratoriums and rent freezes provided temporary relief. Demand temporarily shifted away from cities.
-
2022–2025: The rebound brought surging demand, inflation-driven rent hikes, and tighter housing supply. Today’s affordability crisis is the result.
Policy and Market Implications
The data has clear takeaways for policymakers, landlords, and renters alike:
-
For Policymakers: Affordable housing initiatives, zoning reform, and rental assistance programs are more urgent than ever in high-cost states.
-
For Renters: Relocation decisions may increasingly be guided by affordability, not just job opportunities.
-
For Investors and Developers: Affordable states represent potential growth markets, while expensive states may face political and social pressure for reform.
Final Thoughts
Renters across America live in two very different realities: one where housing consumes more than half their paycheck, and one where it barely dents the budget. These disparities underscore the importance of location in shaping financial futures.
Whether you’re a policymaker trying to ease the burden, a renter weighing relocation, or an investor studying market dynamics, one thing is clear: rent affordability is one of the defining economic issues of 2025.
Source:
Quartz – The 5 states with the most expensive rent in America and the 5 cheapest Read it here