Prospective buyers need to make about $50,000 more now than pre-pandemic in order to “comfortably” afford a home

If it feels like renting is significantly more expensive now than it was just a few years ago, that’s because it is. According to Realtor.com’s June 2024 Rental Report, median rent prices have surged by 21% since 2019, which translates to about $305 more per month on average. In June, the median asking rent was $1,743.

"Single-family rents have been fluctuating around their pre-pandemic growth rate of about 3% this year, after experiencing double-digit increases for most of 2021 and 2022," Molly Boesel, principal economist for CoreLogic, told Fortune. However, "by the end of 2023, growth slowed to the mid-2% range. While single-family rents are rising at a more stable pace, median rent prices continue to climb."

This increase in rent has turned renting into a significant long-term financial burden for many Americans. Over 13 years of renting, Americans can expect to spend approximately $241,000 on rent, around $68,000 on utilities, and about $12,000 on moving expenses.

Despite the high cost, renting remains a viable—if not preferred—option for many. Renting is still somewhat cheaper than buying a home, according to real estate data from Today’s Homeowner. Their figures show that 30 years of renting would cost about $1.26 million on average, slightly less than the $1.3 million homeowners spend over the same period. Housing affordability has become so strained that prospective buyers need to earn about $50,000 more now than before the pandemic to "comfortably" purchase a home. As of late February, a Zillow report indicated that buyers now need an average income of $106,000 to afford a home, which is 80% higher than in January 2020.

Nevertheless, younger generations are finding ways to navigate the challenging housing market despite rising rental and homeownership costs.

“A lot of this may not necessarily involve first-time homebuyers but could include scenarios such as downsizing, rightsizing, and buying homes after the end of relationships,” said Beauchamp. “For many, renting represents flexibility and freedom.”