California rent hikes often outpace pay raises

"Perhaps the best that can be said for the plight of California renters is that it could be worse. My trusty spreadsheet reviewed monthly rents and hourly wage data collected by United Way, comparing 2024 with 2019 for 96 U.S. metropolitan areas, including nine in California. Those statistics show that paychecks are not keeping up with monthly rent payments, both in California and nationwide."

"In those nine California markets, using population-weighted data, tenants experienced 4.8% annualized rent growth over five years to $2,768 per month in 2024. Meanwhile, workers in those metropolitan areas saw wage increases of 5.4%. a year By this benchmark, wages outpaced rents by 0.6 percentage points a year in 2019-24. That slim advantage is, at least, a positive gap. In 87 U.S. markets tracked outside the Golden State, the same math shows rent hikes outpaced raises by 1.1% percentage points annually."

"Please note that the California wage advantage was largely limited to the Bay Area. San Jose wage growth outpaced rent hikes by 5.6 percentage points - that's the No. 1 gap nationally - when contrasting 2% annual rent growth over five years to $3,319 monthly in 2024 vs. 7.6% yearly wage increases. San Francisco wages outpaced rents by 4.4% percentage points - No. 2 nationally - 1.3% annual rent growth to $3,002 monthly vs. 5.7% yearly wage increases."

Data comparing 2019 and 2024 for 96 U.S. metropolitan areas show paychecks are generally not keeping pace with rent payments. In nine California metros, population-weighted rent growth averaged 4.8% annually to $2,768 monthly, while wages rose 5.4% yearly, yielding a 0.6 percentage-point annual advantage for workers. Outside California, rents grew 5.8% annually to $1,980 monthly versus 4.7% wage growth, leaving rents ahead by 1.1 percentage points. The California wage edge was concentrated in the Bay Area, with San Jose and San Francisco posting the largest wage-versus-rent gaps. Los Angeles and Orange saw minor wage gains relative to rents.

Read at The Mercury News