It May Be Easier to Save Money in Manhattan Than in Memphis

By: Emily McCrary-Ruiz-Esparza Buying a home
Photo by Fabien Bazanegue

A recent study from PropertyShark and RENTCafé on discretionary income found that homeowners in 44 of 50 US cities analyzed are able to put some money aside at the end of the month, while renters in more than half of the cities may struggle to make it to payday. And for those living in Manhattan, saving money is more feasible than it is for those living in Memphis.

The results of the study were calculated by subtracting living and housing costs from the median household income in each city (Manhattan, Brooklyn, and Queens were all treated individually).

Discretionary in income for homeowners

Based on the analysis, homeowners in Manhattan net the most discretionary income, with approximately $4,500 left over each month. San Jose and Washington, DC, residents net roughly the same. However, Homeowners in cities like Miami, Memphis, and Cleveland come out with the least discretionary income. In fact, those homeowners are likely incurring a debt each month, with Miami homeowners leading the pack with an estimated $1,200 deficit.

Top 5 cities: where homeowners can save the most money after living expenses

City Estimated discretionary income
1. Manhattan, NY $4,692
2. San Jose, CA $3,501
3. Washington, DC $3,285
4. Seattle, WA $2,785
5. San Francisco, CA $2,673

Bottom 5 cities: where homeowners can save the least money after living expenses

City Estimated discretionary income
1. Miami, FL –$1,219
2. Detroit, MI –$905
3. Cleveland, OH –$842
4. Philadelphia, PA –$719
5. Memphis, TN –$146

Cities like New York and DC are gated cities for the ultra rich, and the gap between those who can and those who cannot continues to widen. The median household income for Manhattanites is just shy of $12,000 a month: 144% higher than the national median monthly income of $4,900. So while it may be more feasible to save money as a homeowner in Manhattan than in Memphis, there is a higher bar to entry when it comes to affording Manhattan real estate.

Incomes just aren’t keeping pace with housing costs: and that widening gap is becoming especially apparent in smaller cities. Those who can afford to live in New York can likely afford to save; those who cannot afford to live in Manhattan likely cannot. With real estate prices rising at twice the rate of incomes, it’s becoming harder for many to make the jump between renting and owning.

Renters struggle to save

Of the 50 cities analyzed, only four afford renters the ability to net some discretionary income. In fact, 38 of the 50 land renters in a deficit.

In general, renters in the US are having a tough go of it, and this study is just another indicator. It’s estimated that 38% of renter households are cost burdened, meaning that they devote more than 30% of their income to rent each month, and more and more are severely cost burdened, devoting more than 50% of income to housing.

Top 5 cities: where renters can save the most money after living expenses

City Estimated discretionary income
1. Virginia Beach, VA $883
2. Austin, TX $265
3. Bakersfield, CA $241
4. Raleigh, NC $229
5. San Antonio, TX $163

Bottom 5 cities: where renters can save the least money after living expenses

City Estimated discretionary income
1. Boston, MA –$2,244
2. Brooklyn, NY –$2,091
3. Oakland, CA –$1,739
4. Miami, FL –$1,734
5. Manhattan, NY –$1,466

Virginia Beach, VA, ranks as the best spot for renters looking to save some cash, with an estimated $800 left over.

Note that this data indicates that renters in Manhattan will have the hardest time making the leap from renting to owning: renters incur an estimated monthly deficit of $1,400, but if they can just make that gigantic leap to owning, they could be saving thousands. Cake, right?

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