Visualizing Rent Burden: A State-by-State Analysis for Marketers

Effective market research relies on precise data. For businesses targeting consumers, understanding the economic landscape,  specifically housing affordability, is crucial.

Rent burden, defined as households spending over 30% of their income on rent, significantly impacts consumer spending patterns and market viability.

This blog post demonstrates how marketers can leverage distinct data points, visualized instantly by Cambium AI, to gain a comprehensive, state-by-state perspective on renter demographics and financial realities in the United States. 

Understanding Total Renter-Occupied Households by State

Before assessing financial strain, marketers require a clear picture of the total renter population. The sheer number of renter-occupied households in a state indicates the overall scale of the rental market, providing a foundational demographic for market sizing and segmentation. This initial data point allows businesses to identify states with large renter bases, which might represent significant market opportunities for products and services relevant to urban living or transient populations. For example, California leads with 5,939,677 renter-occupied households, followed by Texas (4,014,157) and New York (3,490,248).

Visualizing this data provides a clear spatial understanding of where the largest renter populations reside, guiding broad market entry decisions.

Analyzing Rent-Burdened Households Across States

The percentage of renter households spending over 30% of their income on rent is a direct indicator of economic strain. For marketers, this metric is vital for understanding the disposable income available to potential customers. In states with high percentages of rent-burdened households, consumers typically have less money for non-essential purchases, influencing product pricing, promotional strategies, and value propositions. Our analysis shows that states experiencing the highest percentages of rent-burdened households include:

• Florida: 55.5% of renter households are rent-burdened.

• Hawaii: 52.6% of renter households are rent-burdened.

• California: 52.3% of renter households face a rent burden.

• Nevada: 51.6% of renter households are rent-burdened.

• Colorado: 50.1% of renter households are rent-burdened.

This suggests a need for marketers to emphasize affordability or essential benefits in their messaging within these regions.

Identifying Severely Rent-Burdened Markets

When renter households allocate more than 50% of their income to rent, they are considered severely rent-burdened. These markets represent populations under severe financial pressure, with minimal funds remaining after housing costs. For marketers, this signals a market where spending is highly constrained, demanding strategies focused on basic necessities, cost-effectiveness, and essential services. Understanding these highly stressed markets is crucial for avoiding misaligned product launches or marketing campaigns. The analysis revealed that:

• Florida: 28.8% of renter households are severely rent-burdened.

• California: 27.0% of renter households are severely rent-burdened.

• Hawaii: 26.9% of renter households are severely rent-burdened.

• New York: 26.8% of renter households are severely rent-burdened.

• Louisiana: 26.2% of renter households are severely rent-burdened.

The presence of a quarter or more of renter households facing severe rent burden in these states underscores the need for marketers to carefully segment their audience and tailor product or service offerings. For instance, in Louisiana, despite a lower median gross rent ($930) compared to states like California or Hawaii, the low median renter household income ($30,000) contributes to a high severe rent burden percentage.

Examining Median Gross Rent by State

Median gross rent provides direct insight into the cost of housing in different states. While high rents alone do not automatically translate to high burden, they are a primary component of the rent burden calculation. Marketers can use this data to understand the baseline cost of living in a region, which influences everything from local wage expectations to consumer pricing sensitivity. States with the highest median gross rents are:

• California: $1,780

• Hawaii: $1,760

• District of Columbia: $1,750

• Colorado: $1,540

• Massachusetts: $1,533

These states inherently present a higher barrier to entry for renters. Visualizing median gross rent complements rent burden data by showing the cost component of housing affordability. For instance, despite California and Hawaii having high median rents, they also feature prominently in both rent-burdened and severely rent-burdened categories, highlighting the direct impact of housing costs on affordability.

Correlating Median Household Income of Renters by State

The other critical factor in the rent burden is income. Median household income specifically for renter-occupied units reveals the earning capacity of the rental population in each state. A low median income, even with moderate rents, can lead to a high rent burden. This data helps marketers understand the overall economic health of renter communities and their collective purchasing power. The analysis identified states with the lowest median household income for renters:

• Puerto Rico: $14,100

• West Virginia: $28,000

• Mississippi: $29,400

• Louisiana: $30,000

• Alabama: $32,000

By comparing median renter income with median gross rent and rent burden percentages, marketers gain a complete picture of housing affordability.

For example, while Puerto Rico has a low median renter income, its rent burden percentages (29.9% for rent-burdened and 16.1% for severely rent-burdened) are lower than some mainland states, suggesting lower average rent costs temper the burden. This type of combined analysis reveals that income limitations can lead to significant financial strain regardless of overall rent levels.

Comprehensive market understanding extends beyond basic demographics; it requires insight into the economic pressures impacting consumer behavior. Rent burden, severe rent burden, median gross rent, and median renter income are interdependent factors that collectively paint a detailed picture of a state's rental market and its implications for consumer spending.

For marketers, the ability to quickly access, analyze, and visualize these distinct yet interconnected data points from public datasets is invaluable. Cambium AI streamlines this process, enabling users to query complex information in plain English and receive instant, actionable visualizations. By leveraging these precise insights, businesses can develop more effective strategies, optimize resource allocation, and connect with their target audiences based on a clear understanding of economic realities.

Explore how Cambium AI can transform your market research capabilities.

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The data in this post is taken from the US Census 2023 5-year PUMS (Public Use Microdata Sample) data set