MBA RIHA Study Finds Rental Affordability Declined In 82% Of U.S. Metro Areas
Rental housing affordability declined in 82 percent of U.S. metropolitan areas (232 out of 282 metro areas) between 2014 and 2023, with renters experiencing the equivalent of a $256 annual reduction in income on average after accounting for changes in housing quality. This is according to a new report released by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
The report, Housing Demand and the Decline in Rental Housing Affordability, authored by Gary Engelhardt, Ph.D. of Syracuse University, examines the role of housing demand in declining rental affordability and introduces a new approach to measuring affordability that accounts for changes in housing quality, rental prices, and household economic decisions.
“Traditional measures of rental affordability often fail to distinguish between rent increases driven by improvements in housing quality and those driven by rising housing costs.” said Engelhardt. “Our research finds that while rental housing affordability declined in most of the country, as much as half of the increase in rental expenditures over the past decade is associated with improvements in housing quality. These findings underscore the importance of using more comprehensive measures to understand the true extent of rental affordability challenges across markets.”
The study uses data from the 2014–2023 American Community Surveys to develop a new metropolitan index of rental housing affordability. Unlike traditional measures, such as the rent-to-income ratio or the share of cost-burdened renters, the model accounts for changes in housing quality and quantity, distinguishes between supply- and demand-side factors, and considers the relationship between housing demand and household income.
“Rental affordability remains a significant challenge in many housing markets, but this research demonstrates that the factors driving higher rental expenditures are more complex than traditional measures suggest,” said Edward Seiler, MBA’s Associate Vice President of Housing Economics and Executive Director of RIHA. “By better accounting for changes in housing quality and household demand, this study provides a more nuanced understanding of affordability trends and offers valuable insights for policymakers and housing industry stakeholders.”
Key Findings from Housing Demand and the Decline in Rental Housing Affordability<https://s3141176.t.en25.com/e/er?utm_campaign=MBA%20RIHA%20Paper%20-%20November%203%202026&utm_medium=email&utm_source=Eloqua&s=3141176&lid=90364&elqTrackId=06212B6D55CA664B1465DCED2368D105&elq=46d99f310f694cb59d078f63e410b52e&elqaid=16232&elqat=1&elqak=8AF5E2EA172D3687B7DEBC55A1CDA79A431A44546AFFE065F65B3E3227662F9F33D4>:
* Housing quality accounts for a significant share of rising rental expenditures: As much as half of the increase in rental expenditures since 2014 is associated with improvements in housing quality. Because higher expenditures associated with quality improvements do not necessarily reflect declining affordability, traditional measures may overstate the extent of rental affordability challenges.
* Rental affordability declined in most metropolitan areas: Rental housing became less affordable in 232 of 282 metropolitan areas between 2014 and 2023, while affordability improved in the remaining 50 markets after accounting for relevant economic factors.
* The average decline in affordability was equivalent to a $256 annual reduction in income: After accounting for changes in housing quality, the average national decline in rental affordability was equivalent to a $256 annual loss in income per renter household, with larger losses in coastal and major metropolitan areas.
* Affordability trends varied significantly across markets: Mount Vernon-Anacortes, Washington, experienced the largest decline in rental affordability, equivalent to a $1,212 annual income loss per renter household. Conversely, Mankato, Minnesota, experienced the greatest improvement, equivalent to an additional $964 in annual income.
* Traditional affordability measures may provide an incomplete picture: Commonly used indicators, including rent-to-income ratios and the share of cost-burdened renters, do not fully distinguish between changes in housing quality and rising rental prices. The findings suggest these measures should be interpreted cautiously when evaluating housing affordability trends and informing policy discussions.
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