The Cost Of Renting An Apartment In America Versus Europe

If you missed a recent Juice, you can catch up in the Freshly Squeezed section at the bottom of the page. There, you will find our latest thoughts on home ownership. 

Given the obstacles to homeownership for large swaths of the population and how things are only getting worse (something we’ll discuss next week), we can’t lose sight of the rental market. We also can’t forget that Americans aren’t the only ones being squeezed on housing costs. 

So, in today’s Juice, we review the domestic situation and compare it with a few examples we find interesting from abroad. 

On median rent prices nationally, the number you get really depends on who you talk to and how they measure. And this is fine because exactly what rent costs or might cost you depends a lot on where you live and your preferences. Surveying the various guesses (because that’s really what they are) can actually give you a decent picture of what’s up. 

• ApartmentList.com puts the national median at $1,405. They expect modest declines for the rest of the year. 
• Zillow goes high and says the median rent is $2,085. 
• Realtor.com says the median in the 50 largest metros at $1,753, which is only $7 lower than the August 2022 peak. They have studios at $1,455, one-bedrooms at $1,632 and two-bedrooms at $1,941. 

Of course, big cities laugh (or cry) at these numbers. 

In Los Angeles, Realtor.com says the median is $2,885 and that the typical household there spends nearly 39% of their income on rent. In Boston, the respective numbers are $3,022 and 34%. 

With the extremes and medians accounted for, it’s pretty easy for you to make your own guess locally based on your local knowledge as it meets your circumstances and preferences. 

• In total, a recent Harvard study revealed that about half of renters across the country — that’s a record 22.4 million households — dropped more than 30% of their income on housing in 2022. We can only imagine that the number is even worse for 2024. 

And, of course, it’s not like the rent-burdened can just pick up and buy a house. Forget the fact that they probably wouldn’t qualify for a loan or, if they did, be able to afford the monthly payment, but the big obstacle to entry is the down payment. 

You need close to $100,000 to put 20% down on the typical home in America today. 

Which brings us to the rest of the world. 

Consider Spain. 

• Housing prices there went up by 47% between 2015 and 2023 compared to an increase in income of just 17%. In the US, the median price of a home skyrocketed 170%, but income only jumped 78% between 2000 and 2022. 
• A recent study by real estate site Idealista found that “Renting a two-bedroom property (in Spain) costs 83% more than the mortgage payment required to purchase the same home. However, buying needs a down payment of €48,480.”

Like some Americans, many Spaniards can’t afford the down payment. 

Let’s consider the average rent on two-bedroom properties in Spain’s two largest cities:

• Barcelona: €1,574
• Madrid: €1,410

This said, you can still score smaller apartments for €1,000 or less in big-city Spain and even larger places in smaller cities for less than a grand. 

As always, it’s all relative and has a ton to do with scale. 

Elsewhere in Europe, let’s look at the average rent on furnished, one-bedroom apartments:

• Amsterdam: €2,275
• Rome: €2,000
• Paris: €1,862
• Munich: €1,770
• Lisbon: €1,700
• Vienna: €1,190
• Helsinki: €1,170
• Athens: €1,000

Try to get a furnished one-bedroom in Manhattan for under a couple grand as you apparently can in Paris. It’s not happening. 

Because it’s all relative and due to scale, here again, these prices are expensive to many of the people who live in these places, even if they seem like bargains to Americans. This helps explain why at least a few Americans are moving abroad. But the solution to any housing crisis can’t be to leave the country or stay home and simply put up with a city or neighborhood you’re not going to be happy in. 

The Bottom Line: There’s lots happening in the world right now that feels and, in some cases, is urgent. However, what matters to lots of people struggling, particularly with housing, is what’s happening right now — to them — on the ground. If things are tight, it’s difficult to worry about something that feels like it’s happening in a faraway land. 

We need solutions to our housing crisis. And we need them now. Are you listening, Kamala Harris and Donald Trump?

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