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Data: Moody’s Analytics CRE; Chart: Axios Visuals

Rent is increasing faster than income nationwide, putting additional pressure on inflation-burdened households, Axios' Emily Peck writes.

State of play: The median renter in the U.S. would need to spend 29.6% of their monthly income to make an average rent payment in the first quarter of 2023, per a report from Moody's Analytics.

That's an "uncomfortably high" ratio, though a slight dip from last year, when the rent-to-income threshold crossed 30% for the first time ever.

Data: The Skyline Report; Chart: Kavya Beheraj/Axios

Zoom in: The average rent in Northwest Arkansas at the beginning of 2023 was $927, up 27% from the start of 2021, according to the bi-annual Skyline Report.

Meanwhile, the average multifamily vacancy rate dropped from 5% in 2021 to 1.6% as of Jan. 1.

The number of NWA-area renters earning at least $150,000 annually grew 95% between 2016 and 2021, per U.S. Census data.

Zoom out: NWA isn't listed in Moody's tool, but the low-income burden in North Little Rock and west Little Rock are 30% or higher. Downtown, south and central Little Rock are in the upper 20% range.

Tulsa's five submarkets require 25-29% of one's income to rent.

Between the lines: It's still cheaper to rent than buy nearly everywhere in the U.S.

According to a Redfin report out last week, there are only four major metros in the U.S. where a typical home has a lower monthly mortgage than its estimated rent.

Context: New York City was the only "rent burdened" metro in the U.S. in 1999  — meaning renters paid 54% of income for rent, according to Moody's.

By the end of last year, there were six metros in that pricey club, including Miami (42%), Boston (33%) and Los Angeles (35%).

Rent surged during the pandemic for various reasons and remains high, partly as a side effect of surging mortgage rates. Those rates are keeping potential first-time homebuyers on the sidelines — and that's pushing up demand for rentals.

What we're watching: The Northwest Arkansas Council launched a workforce housing center in 2021, Bentonville has a dedicated housing affordability workgroup and the Excellerate Foundation recently broke ground on the Cobblestone Farm Community.  

💭 Worth's thought bubble: On a recent bike ride, I saw at least two multi-family projects I'd never seen, but they didn't look affordable for the average college sophomore trying to make it on their own.

Rent's growing burden on Arkansans

Rent is increasing faster than incomes nationwide, putting additional pressure on inflation-burdened households.

Arkansas

Rent is increasing faster than income nationwide, putting additional pressure on inflation-burdened households, Axios&#x27; Emily Peck <a class="gtmContentClick" data-vars-link-text="writes" data-vars-click-url="https://www.axios.com/2023/05/22/americas-growing-rent-burden" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/22/americas-growing-rent-burden" target="_self">writes</a>.State of play: The median renter in the U.S. would need to spend 29.6% of their monthly income to make an average rent payment in the first quarter of 2023, per a report from <a class="gtmContentClick" data-vars-link-text="Moody&#x27;s Analytics." data-vars-click-url="https://www.moodys.com/web/en/us/about/insights/data-stories/us-rental-housing-affordability.html" data-vars-item="in_content_link" href="https://www.moodys.com/web/en/us/about/insights/data-stories/us-rental-housing-affordability.html" target="_blank">Moody&#x27;s Analytics.</a>

Emily Peck

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Rent's growing burden on Arkansans