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The Lifetime Cost of Renting

Data & Guides Money The Lifetime Cost of Renting

Homeownership is still the ultimate aspiration for millions of people across the U.S., yet for many, taking that important step on the property ladder can be a challenge. A 2022 report by Harvard’s Joint Center for Housing Studies found that just over a third of U.S. households were renters, and more than 21.6 million households spent 30% of their income or more on rental accommodation. [1] Harvard Joint Center for Housing Studies, ‘The State of the Nation’s Housing 2023’ https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_The_State_of_the_Nations_Housing_2023.pdf

The turbulent economic conditions of the early 2020s have fostered a climate where 62% of Americans live paycheck-to-paycheck, according to a PYMNTS Intelligence survey, [2] PYMNTS, ‘The Credit Card Use Deep Dive Edition’ https://www.pymnts.com/study/reality-check-paycheck-to-paycheck-revolving-debt-financing-credit-scores/ — and rent prices aren’t helping. Between March 2020 and May 2023, average rents rose for 37 consecutive months; from $1,614 per month to $1,967 per month. [3] Rent Research, ‘The Rent Report December 2023’ https://www.rent.com/research/average-rent-price-report/

For some, renting can be seen as a stopgap before a deposit can be secured on a home. Today, the average American may be renting until the age of 35; at least according to the National Association of REALTORS® (NAR) who analyzed the average age of first-time homebuyers. [4] National Association of REALTORS ®, ‘Highlights From the Profile of Home Buyers and Sellers’ https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellersWith this in mind, this study seeks to analyze how much people spend before acquiring their first home.

This research, conducted on behalf of Self Financial, analyzes the average cost of rental prices, utilities, insurance, furniture, and the cost of moving over an adult renting life in all 50 U.S. states, including factoring in the cost of student accommodation over four years of college.

Key findings

  • The average American can expect to pay $333,065 for a lifetime of renting including bills and additional expenses, or $25,620 per year as a renter from the age of 22 to 35.
  • Hawaii residents spend $599,242 on renting over their lifetime, or $46,096 per year — the most of any U.S. state.
  • Americans spend an average of $12,145 on moving in and out of rental accommodation during their lifetime.
  • Kansas residents pay the least to rent over a lifetime, spending just $238,225, including expenses.

A lifetime of renting across the U.S. 

This research is based on the assumption that the average U.S. resident will first enter the rental market at age 22 when they finish college and exit around the age of 35 when they are able to afford a mortgage deposit for their first house. This is considered the average age someone purchases their first home according to figures from the NAR. [4] National Association of REALTORS ®, ‘Highlights From the Profile of Home Buyers and Sellers’ https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

This leaves 13 years between a student’s last semester on-campus and them picking up the keys to their own home. This research has factored in the cost of rent for each of those years, including a 3.84% yearly increase based on the average annual rise in rent from 2000-2024 analyzed from figures by the U.S. Department of Housing and Urban Development. [5] Zillow, ‘ZORI: All Homes Plus Multifamily Time Series’ https://www.zillow.com/research/data/

The price for each U.S. state also includes the cost of utilities, furniture, security deposits, insurance, and the cost of moving during this timescale.

Based on this, Americans can expect to spend an average of $333,065 overall across 13 years of being a renter — or an average of $25,620 per year. This includes a spend of $241,303 on 13 years' worth of rent payments, with an estimated $68,074 to be used on utilities, and $12,145 on moves within the same U.S. state.

This research has broken down these costs for all 50 U.S. states, which are addressed in more detail below. For a more detailed breakdown of how we conducted this study, please see the methodology section. 

Lifetime cost of renting in America
Rent (13 years) $241,303
Bills $68,074
Insurance $3,229
Cost of moving (in state) $12,145
Furniture $8,314
Security deposit $1,965

Lifetime rental costs per state

While the U.S. average cost of renting during the 13-year analyzed period is $333,065, a total of 22 states (including Washington DC) sit above the mean. 

The map below shows how each state compares for an estimated lifetime rental amount inclusive of the security deposit (which may or may not be returned).

Expenditure on rent and key expenses Rental payments Bill payments Security deposit Rental insurance Moving costs

Note: The full methodology can be found at the end of this page discussing how each figure was calculated. 

Most expensive states for lifetime rental

In the U.S. today, more than three million households that earn $150,000 per year or more remain tenants. [6] Wall Street Journal, ‘Three Million U.S. Households Making Over $150,000 Are Still Renters’ https://www.multifamilyexecutive.com/property-management/rent-trends/3-million-u-s-households-making-over-150-000-are-still-renters_c While a salary of this level would mean the household earns double the average, [7] Census Bureau, ‘Income in the United States: 2022’ https://www.census.gov/library/publications/2023/demo/p60-279.html external factors can make it more difficult to become a homeowner. 

When talking about a lifetime of rent, the definition in this research goes beyond just the monthly costs. Tenants must also factor in bills, insurance, deposits, furniture, and moving at the end of each lease. These costs can quickly escalate, especially as the average renter is likely to stay in the market until they buy a home at 35. [8] National Association of REALTORS ®, Highlights From the Profile of Home Buyers and Sellers’ https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

This is certainly the case for many residents in the most expensive rental markets. Two of the 10 states with the highest per capita personal income — Colorado and Washington DC, will all cost renters above $450k through a person’s early adult years. But it’s Hawaii that stands out with the highest lifetime rental costs in the study at an estimated $599,242 over a 13-year period, amounting to $46,096 per year.

Rank State Lifetime cost of rental + related costs
1 Hawaii $599,242
2 Colorado $540,772
3 District of Columbia $479,998
4 Maine $451,217
5 California $448,852
6 Connecticut $423,348
7 Rhode Island $405,749
8 Florida $404,904
9 Virginia $403,480
10 Utah $378,722

This research shows that renters in Colorado pay the second-most overall at $540,772 for a lifetime of rent including expenses. They will have to spend around $41,598 annually in the rental market. 

California comes fifth on the list, where the average amount spent over 13 years of renting is $448,852. The Golden State, according to Zillow, also has six of the 10 costliest urban rental markets in the U.S.; with San Jose, San Diego, and San Francisco all priced at $3,000 or more per month on average to rent as of June 2023. [9] Zillow, ‘Steady As She Goes: Rent Growth in June Was Perfectly Average (June 2023 Rent Report)’ https://www.zillow.com/research/june-2023-rent-report-32840/

While a lifetime of rent in New Jersey may not cost as much as in Hawaii or California, data shows that the Garden State isn’t a walk in the park for tenants. 

Newark, the state’s largest city, was ranked by ForbesAdvisor as the worst city in the U.S. for renters. [10] NJ.com, ‘Newark was named the worst place in the country for renters. It’s true, locals say’ https://www.nj.com/essex/2023/10/newark-was-named-the-worst-place-in-the-country-for-renters-its-true-locals-say.html Its status within the NYC commuter belt makes it an attractive option for young professionals, yet the influx of young professionals from Manhattan means that 78% of the city’s 311,000 residents live in rental accommodation, and more than half (55%) spend 30% or more of their monthly income on rent. 

This research shows that New Jersey is the 15th on the list of most expensive states for a lifetime of rent, costing tenants $369,985 to live between the ages of 22 and 35.

Most affordable states for lifetime rental

At the opposite end of the spectrum, Kansas stands out as the cheapest U.S. state for rent. A lifetime in the market, including expenses, will set tenants back $238,225; or $18,325 per year. 

Rank State TOTAL
1 Kansas $238,225
2 Wisconsin $240,913
3 Idaho $244,551
4 Nevada $244,782
5 Mississippi $249,329
6 Oklahoma $255,846
7 Arizona $259,413
8 Indiana $262,276
9 Iowa $264,940
10 South Dakota $265,281

Wisconsin is the second-cheapest state for lifetime rental. The state has some of the lowest insurance premiums in the U.S., and this research found that renters will pay just $1,924 for rental insurance over their lifetime — 50% lower than the national average.

Rent burdens have gotten worse in recent years

A variety of factors, from housing demand to regional salaries can influence the rents people pay, yet the national trend indicates that an increasing number of Americans find themselves rent-burdened. 2023 data from Moody’s suggests that the typical U.S. renter now spends 30% of their income on rent — up from 25% in 2020. [11] New York Times, ‘The Typical American Renter Is Now Rent-Burdened, a Report Says’ https://www.nytimes.com/2023/01/25/realestate/rent-burdened-american-households.html

While the easing of high inflation following the COVID-19 pandemic led to a slight reduction in rent prices in 2023, [12] NBC News, ‘Rentals across the U.S. may be easing and finally giving tenants a break‘ https://www.nbcnews.com/business/real-estate/rent-prices-falling-giving-renters-sigh-of-relief-rcna129528 this research further highlights a nationwide discrepancy between rent prices — one where Hawaii residents can pay almost $361,017 more for a lifetime in the rental market than their counterparts in Kansas ($238,225). 

Methodology

Rent and utilities

Zillow’s market rate rent data was used to collect the median monthly rent costs for all property types and numbers of bedrooms for each state [5] Zillow, ‘ZORI: All Homes Plus Multifamily Time Series’ https://www.zillow.com/research/data/ This is a combined value of rent and utilities. The average cost of utilities for an apartment by state was collected from RentCafe. [13] RentCafe, ‘How Much Do Apartment Utilities Cost by State’ https://www.rentcafe.com/blog/apartment-search-2/money/apartment-utilities-breakdown/

Lifetime rental period

As the typical age for a first-time homebuyer is 35 the study assumed an individual would start renting at 22 after leaving college. [4] National Association of REALTORS ®, ‘Highlights From the Profile of Home Buyers and Sellers’ https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

Renter’s insurance

As property insurance would be covered by landlords, renters insurance was factored in which covers a renter’s possessions. Estimates from January 2024 were taken from Insure.com’s state-specific average cost, however, many options are available so this should be taken as a general idea. [15] Insure.com, ‘Renters insurance calculator: How much renters insurance costs by state and city in 2024’ https://www.insure.com/renters-insurance/renters-insurance-estimate-by-state/ This assumed a ‘coverage limit of $100,000 for liability coverage, personal property coverage ranging from $20,000 to $40,000, and a $1,000 deductible’. Insure.com commissioned Quadrant Information Services to gather renters' insurance rates.

Security Deposit

This study assumes that renters do not get back approximately 25% of their security deposits over a lifetime of rent, based on a survey of renters which found that 26% of renters have lost their security deposit at some point. [16] Rent.com, ‘Tips for Getting Your Security Deposit Back’ https://www.rent.com/blog/tips-for-getting-your-security-deposit-back/?_gl=1*1bnkrb5*_ga*NTAyMTE0NDU2LjE3MTM1MTQxNDY.*_ga_LSGT55PFTP*MTcxMzUxNDE0NS4xLjEuMTcxMzUxNDIwMi4zLjAuMA

Furniture

The study reviewed a number of rentals on offer in some key cities and found that unfurnished properties were more common than furnished, therefore, this study calculated the cost of furnishings.

This study estimated what it might cost to purchase some key items for a home or apartment. This included: a couch, coffee table, floor lamp, three beds and mattresses, and three nightstands. There would of course be more furniture an individual or family could purchase, however the study kept to essentials for the sake of the analysis. The purchase cost was doubled over the 13-year period to assume replacing all goods at least once. Furnishing costs came from IKEA, where the category of furniture was scraped and the mean average cost was taken per item in January 2024. [17] IKEA.com https://www.ikea.com/us/en/cat/beds-bm003/

Moving homes

One 2019 study of U.S. Census data suggests almost 60% of people still live in the state they grew up in, this study used this to review moving costs within their state instead of out of state. [18] Bloomberg, ‘The Geography of America’s Mobile and ‘Stuck,’ Mapped’ https://www.bloomberg.com/news/articles/2019-03-05/mobile-vs-stuck-who-lives-in-their-u-s-birth-state Average moving costs per state were taken for studios, 1, 2, 3, 4, and 5 bedroom properties, with the overall cost weighted toward occupancy percentages as dictated by the U.S. Census Bureau data mentioned. Moving estimates came from Move Buddha per state, Arizona as an example here. [19] MoveBuddha, ‘How Much Does it Cost to Move to Arizona?’ https://www.movebuddha.com/move-costs/az/

The study calculated the cost of moving every 27.5 months, which was found to be the average rental period for Americans from a 2019 study. There is limited other data available on the movement frequency of renters in America. 

Sources

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