America’s 41 million renter households spent $441 billion on rent in 2014, up 4.9 percent from 2013 due to the combination of rising rents and a growing renter population. This makes America’s rental expenditures roughly similar in size to the total economic output of North Carolina and about double what Americans spent on new cars.[1]
New York-Northern New Jersey area renters spent nearly $50 billion on rent in 2014, about 11 of every 100 rent dollars spent in the United States despite being home to only eight out of 100 renters nationwide. Los Angeles area renters came in a distant second, spending $34 billion on rent (about 8 percent of the national total), followed by San Francisco ($15 billion, or 3 percent), Chicago ($14 billion, or 3 percent) and Washington, DC ($13 billion, or 3 percent). Rounding out the top 50 metro areas, renters in Birmingham, Alabama spent $1.1 billion in 2014 (0.2 percent of the national total) and renters in Louisville, Kentucky spent $1.2 billion (0.3 percent).
The table below shows our estimates of the total rent paid in 2013 and 2014 for each of the top 50 metro areas, and for the nation as a whole.
To calculate the total rent paid, we estimated the number of renter households in each metro area based on 2013 metro-level data from the U.S. Census Bureau’s 2013 American Community Survey (ACS), and on the national level using the March 2013 and March 2014 Current Population Surveys (CPS). (Microdata files made available by the University of Minnesota, IPUMS-USA.)
We then summed the monthly Zillow Rental Indexes (ZRI) for each year, including a best-fit ARIMA forecast of December 2014 ZRI as the final month of data for the current year are unavailable at the time of this publication. Finally, we took the product of the estimated number of renter households and the summed ZRIs for each metro, and scaled the results by a rental stock adjustment factor, which controls for differences in the footprint of the rental stock and the total housing stock. The rental stock adjustment factor was derived from the relationship between ZRI and monthly contract rents reported in the 2013 ACS for each geography.
[1] Bureau of Economic Analysis, National Income and Product Account Tables.
