This Is The State With The Highest Rents

By Douglas A. McIntyre Published May 29, 8:41AM EDT

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This Is The State With The Highest Rents — © Art Wager / E+ via Getty Images

Home prices have skyrocketed over the last two years. Prices have continued to rise to record levels recently. This may change soon, as a surge in mortgage rates has made homes more expensive.

There were several causes of the run-up in home prices. One was historically low mortgage rates. Another was the new mobility among millions of Americans who could work from home and relocate to places they wanted to live rather than where they had to live to be next to offices.

As home prices rose, people turned to renting as an alternative. However, as a consequence, rental prices rose as well. According to real estate research firm CoStar Group, rents in the U.S. rose 11.3% last year. In contrast, over the previous five years, gross rents increased by 18.1%.

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To determine the state with the highest rents, 24/7 Wall St. reviewed five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey. The median gross rent across the United States is $1,096, and state values range from as low as $732 in West Virginia to as high as $1,651 in Hawaii.

In many of the states where rent costs are high, a higher share of housing units is occupied by renters, rather than homeowners. This is largely because these states have expensive housing markets as a whole, meaning residents are priced out of the possibility of owning a home and are forced to rent. Hawaii is the most expensive state in which to rent, with a median gross rent of $1,651. In Hawaii, nearly 40% of housing units are occupied by renters, above the 35.6% U.S. share and the fifth-highest share among states.

Generally, the states with the highest rents tend to have higher household incomes. However, even after accounting for those higher incomes, rent in these states is less affordable. In Hawaii and California, which rank first and second on this list, rent as a percentage of state median household income is second and fourth highest, respectively.

The most expensive state to rent a home is Hawaii. Here are the details:

> Median monthly rental cost: $1,651
> Share of income typically spent on rent: 32.5% (2nd highest)
> Rental occupied housing units: 39.7% (4th highest)
> Median home value: $636,400 (the highest)

Methodology: To determine the state with the highest rents, 24/7 Wall St. reviewed five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey. States were ranked based on the median gross rent. To break ties, we used the median gross rent as a share of household income.

Additional information on median gross rent as a share of household income, share of households occupied by renters, and median home value are also five-year estimates from the 2020 ACS. Because the Census Bureau didn’t release one-year estimates for 2020 due to data collection issues caused by the COVID-19 pandemic, all ACS data are five-year estimates.

Click here to read States With The Highest Rents

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.