U.S. Renters Paid $441 Billion in Rent in 2014, Up Nearly $21 Billion Since 2013

Rent paid by New York-Northern New Jersey metro renters accounted for more than 10 percent of all rent paid in America

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Dec 30, 2014, 08:00 ET

SEATTLE, Dec. 30, 2014 /PRNewswire/ -- Americans shelled out $20.6 billion more in rent in 2014 compared to 2013. Cumulatively, U.S. renters paid $441 billion in rent in 2014 compared to $420 billion last year, an increase of nearly five percent (4.9 percent), as both the number of renting households and the average rent rose nationally, according to a Zillow rentals analysisⁱ.

Locally, the Bay Area, consisting of the San Jose and San Francisco metros, saw the largest jump in cumulative rent paid in 2014, up 14.4 and 13.5 percent respectively. Rent per household in the San Jose, Calif. metro rose by $197 per month, while rent in the San Francisco metro rose by $163 per month.

Out of the top 50 largest U.S. metro areas, the largest amount of cumulative rent was paid the New York-Northern New Jersey ($50 billion) and Los Angeles ($34 billion) metros. The smallest amount of cumulative rent was paid by renters in Birmingham, Ala. ($1 billion), Louisville, Ky. ($1.2 billion) and Buffalo, N.Y. ($1.2 billion).

Nationally, the total number of renters is estimated to have grown 1.9 percent in 2014ⁱⁱ. Over the same time period, the median rent paid increased 2.9 percent.

"Over the past fourteen years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand, and insufficient growth in the supply of rental housing. This has created real opportunities for rental housing owners and investors, but has also been a bitter pill to swallow for tenants, particularly those on an entry-level salary and those would-be buyers struggling to save for a down payment on a home of their own," said Zillow Chief Economist Stan Humphries. "Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable."

Total Rent Paid By The Largest 25 Metros Covered by Zillow*
Metro	Cumulative 2013 Rent	Cumulative 2014 Rent	Percent Change 2013-2014	Monthly Payment Change 2013-2014ⁱⁱⁱ
United States	$420.4 billion	$441 billion	4.9%	$26
New York-Northern New Jersey	$48.2 billion	$50 billion	3.6%	$20
Los Angeles	$32.5 billion	$34.2 billion	5.3%	$42
Chicago	$13.4 billion	$14.3 billion	7.4%	$50
Dallas-Fort Worth	$9.4 billion	$10 billion	6.2%	$35
Philadelphia	$7.8 billion	$8.1 billion	4.4%	$23
Houston	$8.2 billion	$8.8 billion	7.2%	$43
Washington, DC	$13.1 billion	$13.4 billion	2.1%	$2
Miami-Fort Lauderdale	$9.7 billion	$10.5 billion	7.7%	$59
Atlanta	$6.8 billion	$7.2 billion	5.7%	$30
Boston	$9.2 billion	$9.8 billion	6.9%	$58
San Francisco	$12.8 billion	$14.6 billion	13.5%	$163
Detroit	$4.3 billion	$4.5 billion	4.6%	$20
Riverside, Calif.	$5.9 billion	$6.2 billion	4.4%	$26
Phoenix	$5.9 billion	$6.2 billion	6.0%	$34
Seattle	$7.1 billion	$7.8 billion	8.6%	$71
Minneapolis-St Paul	$4.3 billion	$4.5 billion	4.8%	$25
San Diego	$7.9 billion	$8.3 billion	6.1%	$55
St. Louis	$2.7 billion	$2.8 billion	3.3%	$10
Tampa, Fla.	$4.1 billion	$4.3 billion	4.9%	$24
Baltimore	$4.2 billion	$4.3 billion	3.0%	$9
Denver	$4.4 billion	$4.9 billion	10.8%	$86
Pittsburgh	$2.2 billion	$2.4 billion	10.6%	$56
Portland, Ore.	$3.9 billion	$4.1 billion	7.1%	$46
Sacramento, Calif.	$3.8 billion	$4.0 billion	5.2%	$33
San Antonio	$2.6 billion	$2.8 billion	5.5%	$25

* Data for the 50 largest metros covered in this Zillow rentals report is available.

About Zillow:

Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgages, Zillow Rentals, Zillow Digs®, Postlets®, Diverse Solutions®, Mortech®, HotPads™, StreetEasy® and Retsly™. The company is headquartered in Seattle.

Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions, StreetEasy and Digs are registered trademarks of Zillow, Inc. HotPads and Retsly are a trademarks of Zillow, Inc.

i Total rent paid is calculated by first estimating the number of renter households in 2014 in each metro based on 2013 metro-level data and 2014 national data. We then take the sum of all the monthly Zillow Rent Indices in 2014 and multiply it by the estimated number of households. Forecasting was used to calculate value change during December 2014. Lastly, results are then scaled by a rental stock adjustment factor which controls for differences in the footprint between the rental stock and the total housing stock.
ii Zillow based this analysis in part on data available at the local and national level from the American Community Survey (ACS) and the Current Population Survey (CPS). Full local and national data was available on number of renters from the ACS for 2013, but was unavailable for 2014 at the time this analysis was conducted. Zillow used the 2014 CPS to determine overall growth in number of renters between 2013 and 2014, but this data was only available on the national level. For purposes of this analysis, we assumed the total number of renters in each local market grew at the same pace as the nation as a whole, or 1.9 percent year-over-year.
iii Monthly payment change per household accounts for additional renter households added in 2014.

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SOURCE Zillow, Inc.