For the first time in years, income growth is outpacing rent increases, offering renters a much-needed financial reprieve, according to a new report from Zillow released Tuesday. The combination of higher wages and slowing rent hikes has freed up an additional $193 per month for American renters. Rent rose by 1.8 percent year-on-year in March to an average of $1,910, marking the slowest increase since 2020. Meanwhile, income grew by 3.9 percent in March, as reported by the Federal Reserve Bank of Atlanta.
Regional Variations in Rent Affordability
The gap between income and rent growth is even more pronounced in certain cities. The top five metros offering the biggest yearly savings for renters compared to March 2025 are: Austin ($3,182), Tampa ($3,110), Denver ($3,002), San Antonio ($2,990), and Phoenix ($2,906). Texas, a pandemic relocation hotspot, has seen cities like Austin and San Antonio build ample housing, reducing demand and rent prices. An April 2026 study from Apartment List noted that the Austin metro permits new homes at the fastest pace of any large metro, helping to soften rents.
Austin Leads in Affordability
The Zillow study identified Austin as the most affordable metro for renters, followed by Salt Lake City, Utah; Raleigh, North Carolina; Minneapolis; and Denver. In stark contrast, New York City was deemed the least affordable metro, followed by Miami; Los Angeles; Riverside, California; and Boston. Among the 50 cities analyzed, San Francisco had the smallest gap between income and rent at $38, followed by San Jose ($67), New York ($92), Chicago ($112), and Virginia Beach, Virginia ($125).
Persistent Affordability Challenges
Despite the positive signs, the cost of living remains elevated compared to pre-pandemic levels. The income required for the average American to afford rent rose 1.7 percent year-on-year to $76,417 in March, a 35.4 percent increase from 2019. Zillow Senior Economist Kara Ng noted, "This moment of relief doesn't erase the affordability challenges that built up over time, but it does give renters more flexibility than they've had in years."
Outlook for Renters
Further rent easing may be on the horizon. The nation's rental vacancy rate has risen steadily from a 40-year low of 5.6 percent in late 2024 to 7.2 percent by the end of 2025, according to Federal Reserve Bank of St. Louis data. This increase in available rentals could continue to moderate rent growth, providing additional relief to renters across the country.
