While a volatile economy and inflating rent costs have caused concern in cities across the U.S., a new study shows the Jefferson City area is the best metro in the nation for millennial renters.
The study ranked Jefferson City No. 257 among 257 U.S. metros in terms of the difference between its median wages and the income needed to rent within the area, with wages coming in at 35 percent larger than what's needed for rent. A typical one-bedroom rental within the metro area is $581, according to the data, and an annual wage of $23,240 would be needed to afford it -- far below the area's median annual income of $31,414 for millennials, defined in the report as those currently aged 26-41. The data showed 22 percent of local millennials renting.
Those numbers are a far cry from the No. 1 ranked area in the country: The Santa Maria-Santa Barbara metro residents needed to bring in $87,080 a year to keep up with one-bedrooms costing $2,177 a month, though the median wage for residents is only $33,508 a year, creating a 61.5 percent negative gap. The area sees 35.4 percent of its millennial population renting.
The U.S. as a whole had a negative 20.6 percent renter wage gap, with $43,547 in annual wages required to afford a one-bedroom rental and a median wage of $34,555. The median one-bedroom rent in the U.S. was $1,089, with 27.2 percent of American millennials renting.
The report, published by Filterbuy, compiled statistics from the U.S. Census Bureau's 2020 ACS PUMS 5-Year Estimate dataset, which published economic data on the national, state, district, division and city levels. Only metropolitan statistical areas with populations of 100,000 or more were included in Filterbuy's report.
The report notes it's recommended that renters choose apartments that will take up less than 30 percent of their wages, a recommendation that was used as a metric to measure affordability in the study.
The millennial generation is the most prominent in the rental market, according to the report. While the age range has historically seen people buying a home, the report pointed to rising rent and real estate costs, as well as high debt levels, inflation, construction costs and a host of other concerns that have arisen in the wake of the COVID-19 pandemic as catalysts for the popularity of rentals among this generation.
"But even before the recent spike in rents, the gap between what a typical rental costs and what the typical worker can afford based on their income has been growing," the report read. "Amid stagnant wages for workers, especially low-income earners, and a nationwide shortage of housing stock, renters are finding it more difficult than ever to secure affordable housing."
The Capital City area also far outpaces the rest of the state's metros' wage-rent gaps. Joplin, which ranked the highest for Missouri and 149 overall, had a negative 8.1 percent gap. Workers there earned a median annual wage of $24,084, though $26,200 was needed to afford an apartment, which had a median cost of $655 a month. Kansas City, which ranked No. 174, saw a negative 2.8 percent wage-rent gap, though those were the only two areas to report a negative difference.
St. Louis came in at No. 223 with a 7.5 percent lead for wages over rent, while 237th ranked Columbia saw wages 11.7 percent above rent costs. St. Joseph, which came in a No. 239, had a 12.1 percent wage-rent difference, while Springfield, the closest Missouri competitor to Jefferson City, ranked No. 246 with a 17.5 percent difference -- half as big of a lead as the Capital City area had.
The authors also noted much of the negative disparity between wages and rent was prevalent in coastal areas, while interior states were most likely to see renters' wages outpacing rent costs. The Show-Me State ranked No. 43 with a positive 8.5 percent difference in favor of wages, with renters needing an annual income of $28,960 to afford an apartment. The state's median income came in at $31,414.
The state with the highest difference was California with a negative 43.5 percent difference between income and rent, while lowest-ranked South Dakota saw a 19-point lead for wages over rent.
Read the full report at filterbuy.com/resources.