Michigan City is the most expensive city for renters in the USA

It’s not as if rents are going down anytime soon, but high rents and low wages mean many renters in cities across the country are worse off than the rest.

That’s why Michigan is considered to have the most expensive rental prices in the country, despite its below-average cost of living.

Finance Buzz has released a list of the 15 most expensive cities for renters in America; unsurprisingly, Detroit came out on top.

It’s not that rents are outrageously high in the Motor City – the average monthly rent in the city is $1,212, compared to $1,518 nationwide and $1,375 a month in Michigan – it’s that wages in Detroit don’t allow rents that are considered cheap to be reasonable for renters.

The median annual income for Detroiters is $36,453, well below the national average salary of $63,795 and the state median salary of $63,440. This means that renters in Detroit are giving 39% of their monthly income to their landlords.

A good rule of thumb for renters is to spend 30% of their income on rent. Of course, this doesn’t work for everyone, especially in low-income areas. The more residents have to shell out for rent, the less they have left for utilities, groceries, savings, emergencies, and purchases that improve quality of life.

Let’s look at just one more bill in Michigan, car insurance. Michigan drivers pay the most in the nation for car insurance: an average of $113 per month for minimum coverage and $304 for comprehensive coverage. A renter in Detroit with comprehensive coverage is likely to spend half of their income on rent and car insurance, while with minimum coverage it’s more like 42%.

No wonder 20% of Michigan drivers are uninsured.

Of course, this doesn’t apply to everyone who lives or rents in Detroit, but it helps explain why the city’s turnaround is happening so slowly.