72°F
weather icon Clear

How much do Las Vegas residents need to make to afford rent?

Updated February 16, 2024 - 7:55 pm

Las Vegas households now need to make at least $69,810 annually to be able to afford rent in the valley, which is above the median household income, according to a new report from Zillow.

Rental rates have increased 1.9 percent year over year, and now sit at $1,745, and Mark Stayton, a senior public relations specialist with Zillow, said the valley is experiencing an odd phenomenon, units to rent are up but rent has been historically climbing.

“The vacancy rate, which is seasonally adjusted, in Vegas is 9 percent, and has risen by 2.5 percentage points over the course of the pandemic, the 12th largest hike among the 50 largest U.S. metros by population,” he said.

Zillow statistics show the average household now needs to make almost $70,000 annually to afford rent, a 34 percent increase since the onset of the pandemic. Affordable rent is usually categorized as spending less than 30 percent of your income on housing costs per month.

The U.S. Census Bureau estimates that as of 2022 the median annual income for a household in the Las Vegas Valley was $66,356, a number forecasters estimate did not grow substantially last year due to decreased wage growth in the valley and across the nation.

Back in early 2021, the average a household needed to make to afford rent was $52,020, which means the Las Vegas Valley had the 15th biggest jump of all major metro areas.

Rental rates usually rise to start the year, said Skylar Oslen, the chief economist at Zillow and author of the company’s January rental report, however the COVID building boom is finally starting to pay off for renters.

“Since the beginning of the pandemic, rental prices have surged 29.4 percent, averaging an annual increase of 7 percent over the last four years,” she said. “However, nearly two-thirds of this increase happened in 2021 alone. Following this sharp rise, a boom in apartment construction and a slowdown in economic growth have taken the heat off.”

Oslen said there should be more relief in rental rates across the U.S. in store for 2024 as record levels of apartment construction across the nation should keep rates “subdued.”

“Softer rent growth is ultimately good news for today’s renters who have faced significant financial strain from both general and rent inflation throughout the pandemic,” she said. “With wage growth now slower, but still persistent, rent affordability, the share of a typical household’s income that would go to market rate asking rent, stabilized over the past year at 29 percent. That’s down a percentage point from the record high set in June 2022.”

Rental rates in the Las Vegas Valley actually dropped slightly to start the year, and RentCafe, which is owned by Yardi, has Las Vegas as the 92nd most active rental market for major metros, which accounts for rental activity through page views and specific searches.

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.

Don't miss the big stories. Like us on Facebook.
THE LATEST