Rental housing affordability eroded across the vast majority of U.S. metropolitan areas over the past decade, according to new research from the Mortgage Bankers Association’s Research Institute for Housing America. The study finds that from 2014 to 2023, renters in 82% of U.S. metros faced declining affordability even after adjusting for shifts in the quality of the housing they occupy.
The report, “Housing Demand and the Decline in Rental Housing Affordability,” authored by Gary Engelhardt, Ph.D., of Syracuse University, focuses on how housing demand has contributed to this affordability pressure. Rather than looking only at headline rent changes, the research incorporates a broader framework for understanding what renters are paying for and how those choices have evolved over time.
Central to the analysis is a new approach to measuring rental affordability that explicitly accounts for changes in housing quality, rental prices, and household economic decisions. This framework attempts to separate rent increases that stem from genuine improvements in the housing stock from those driven by higher underlying housing costs. By doing so, the report aims to provide a clearer picture of how much of the affordability strain is attributable to rising prices versus renters moving into or remaining in higher-quality units.
When these quality adjustments are applied, the study estimates that renters effectively experienced an average annual reduction in income of $256 over the 2014 to 2023 period. This figure is presented as an “equivalent” loss in income after factoring in the interplay between rents, housing quality, and household choices, underscoring that even with better-quality housing, the financial burden on many renters increased.
Engelhardt notes that traditional measures of rental affordability often overlook the distinction between paying more for better housing and paying more for the same or lower level of quality. According to the report, as much as half of the increase in rental expenditures over the past decade can be linked to improvements in housing quality, not solely to higher costs for comparable units. This nuance is important for understanding how renters are allocating their housing dollars and how the rental market has evolved.
By reframing affordability through a quality-adjusted lens, the research highlights the complexity of interpreting rent growth and its impact on renter finances. While most metros registered declines in affordability, the findings suggest that part of the higher spend reflects an ongoing shift toward improved housing quality, even as many households still face increased pressure on their budgets.
