Consumer Comeback Blog

Top 20 Cities Where Consumers Underestimate Cost of Rent

When it comes to apartment hunting, financial experts often advise consumers to expect to spend between 25-35% of your monthly income. But many first-time renters or relocators get a rent reality check when their rent cost expectations fall short of actual market prices.

According to the Insurance Information Institute, renters outnumber homeowners in the nation’s five largest cities. The mortgage crisis also scared millions of would-be home-buyers to rent instead of own, so increased demand for rental houses and apartments continues to drive up rent prices.

Data from Apartments.com indicates that site users underestimated the cost of rent in the top 20 most searched markets by 7-41%. One of the biggest discrepancies between estimated rent and actual rent is in Brooklyn, where Apartments.com reports that consumers search for one bedroom apartments at an average rent of $1,506, but the actual average rent for a one bedroom in Brooklyn is $3,041.

“It’s important to remember that average rents are just that—the average,” Dick Burke, senior vice president and general manager, Apartments.com, said in a press release. “If a would-be renter goes into their search with unrealistically high average rent expectations, they could end up over-paying in the market. By the same token, if they base their moving decision on unrealistically low rent expectations, they could be wasting valuable time searching for something that doesn’t exist as well as setting themselves up for disappointment or worse yet, getting into a long-term lease that isn’t fiscally responsible.”

Top 10 markets where consumer underestimate the cost of rent:

  1. Brooklyn, N.Y.
  2. Jersey City, N.J.
  3. Oakland, Calif.
  4. Boston, Mass.
  5. New York City
  6. Denver, Colo.
  7. Los Angeles
  8. Fort Lauderdale, Fla.
  9. San Francisco, Calif.
  10. North Hollywood, Calif.

Top 10 markets where consumers overestimated rent costs:

  1. Albuquerque, N.M.
  2. Mesa, Ariz.
  3. Des Moines, Iowa
  4. Jacksonville, Fla.
  5. Hollywood, Fla.
  6. Bronx, N.Y
  7. Sacramento, Calif.

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