Renter Wealth Index

Overview

Rent has outpaced income growth in most U.S. markets over the past decade. For the roughly 42 million renter households in the United States, that gap compounds into something more serious: limited ability to save, invest, or absorb a financial shocks. The median homeowner holds more than 40 times the net worth of the median renter — a disparity that has grown by 70% since 1989 and will continue widening without new pathways for renter wealth-building.¹

 

The Lafayette Square Institute data team created the Renter Wealth Index to make renter financial precarity measurable and place-specific. By combining seven indicators drawn from national data sources into a single place-based score, the index helps policymakers, practitioners, and investors identify where programs supporting renter wealth-building could most significantly expand access to economic mobility — and direct pilots, capital, and policy interventions accordingly. 

Facts and Takeaways

Renters comprise roughly one-third of all U.S. households yet hold less than 3% of the accumulated wealth of homeowners.² The scale of the challenge is significant. Nearly half of all renter households — 22.6 million Americans — are cost-burdened, spending more than 30% of income on housing and utilities, an increase of nearly 15% since 2019.³ Nationally, renters now need roughly $80,949 in annual income to afford the typical rental unit, up from $60,000 in 2020 — approximately $20,000 more than the median American salary.^4,5 Zillow data shows that in the past five years, apartment rents increased 28.7% and single-family home rents increased 42.9%, while median household income grew just 22.5%. After paying for housing, 65% of working-age renters lack sufficient income to cover basic necessities.⁶

This wealth gap is structural. Only 48% of renters own any appreciating assets, compared to 78% of homeowners.⁷ Roughly two-thirds of renters believe they will never become homeowners — meaning for approximately 71 million Americans, the traditional pathway to wealth-building through homeownership feels permanently out of reach.⁸

 

 

The Renter Wealth Index is a core component of Lafayette Square Institute’s work to create new pathways to wealth-building for renters nationwide. By quantifying renter financial precarity down to the zip code level and connecting place-based need with actionable strategy, the index gives practitioners, policymakers, and investors the data foundation to target renter wealth solutions where they can prove both feasible in capital markets and consequential for working-class households. 

Building the Investment Policy Agenda

LSI has launched the National Renter Wealth Coalition (NRWC) to convene economic mobility, housing finance, and policy experts to identify, operationalize, and scale solutions that expand wealth-building pathways for working-class renters across the United States. The Renter Wealth Index supports that mission by connecting place-based needs with actionable strategy: pinpointing the geographies where renter wealth models can deliver significant benefits through pilots, capital deployment, and policy innovation.