Can Texas Renters Afford The Holidays?

AUSTIN, TX — Tis the season to be thrifty, and it might not be by choice either. After spending on the holidays in the way of gifts, dinners and other seasonal costs, some renters in Texas cities are left with very little money left over.

In their latest study, researchers at apartment search website RENTCafé found the U.S. renters are left with little cash — if any—after taking care of rent and living expenses, not to mention the winter holiday spending. "We don’t want to steal the holiday cheer," researchers said via email, "but we can’t hide from the cold, hard facts."

In Texas, those post-holiday balances run the gamut, from El Paso where renters manage to with a positive average balance of $280 — the largest in the state — to Dallas where renters end up $89 in the red after their holiday spending.

Bottom line is, analysts said, the average American renter household cannot afford the holiday season without $549 in savings, researchers said. Crunching the numbers — with data culled from the U.S. Census, Bureau of Labor Statistics, National Retail Federation and Yardi Matrix — researchers concluded that the average American family of four spends about 2.8% of their annual income on winter expenses such as gifts and family dinners, ending the season with a negative balance of $549.

Some cities fare better than others in the study, with renters in other regions actually emerging with net gains to varying degrees. Out of the 50 largest U.S. cities studied, 26 of them aren't that merry, researchers noted. Renter families in these cities needed savings for the winter holidays, with the expensive hubs of Manhattan, Boston and San Francisco leading the way.

On the other end of the spectrum, renters in the remaining 24 cities are actually left with some money in the piggy bank even after all the holiday expenses, researchers noted. This ranges wildly, from a robust $689 in Virginia Beach to a modest $6 in Tucson.

In state capital of Austin, renters end up with a balance of $44 when it's all said and done, holiday-wise. Here's the Austin breakdown:

• Median renter income (two months): $7,156.
• Average rent (two months): $2,600.
• Cost of living (two months): $3,290.
• Holiday spending: $1,222.

Other Texas cities were studied. Renters in El Paso end up exponentially better than those in Austin, with a whopping $280 balance left over for renters after their holiday spending — the ninth-greatest balance of the studies surveyed nationwide. Of course, it's cheaper to live in El Paso than it is in Austin, with rents in the former city for a two-month period of $1,870 which offsets the exponentially lower average income there of $4,785. The cost of living in El Paso is considerably less than that of Austin, at $1,488 — more than twice that in the capital city.

Renters in Arlington, Texas, also fared better than Austin as the city with the 12th-largest, post-holiday balances for renters at $199. Fort Worth was next in line, with renters there pocketing a $176 balance. In San Antonio, renters end up with a $117 balance, good enough to achieve the 18th place in the rankings. Those renting in Houston net a balance of 33 bucks.

After that, other Texas cities studies go into the negative territory. Renters in Dallas end up with a negative $89 after all their holiday spending.

In achieving its rankings, RENTCafé researchers utilized the following methodology.

• This analysis covers the 50 largest U.S. cities by population.
• All calculations were based on November’s national and local average rents for multifamily rental communities with 50 or more units, as provided by Yardi Matrix.
• For the income figures, RENTCafé analysts used the past 12 months’ median renter household income values according to the 2012-2016 American Community Survey 5-Year Estimates, at national as well as city level.
• To estimate the average household’s holiday-related expenses, RENTCafé used the National Retail Federation’s 2017 holiday spending forecast, adjusted to households with two earners by doubling the amount spent on gifts and considering the non-gift purchases and other holiday-related expenses to remain unchanged regardless of the number of earners per household. The sum obtained this way ($1,575) represents 2.8% of the median household income at national level ($55,322 as defined by ACS). Ultimately, RENTCafé researchers applied the same percentage to the median renter household income in each city.
• The cost of living was calculated in all cases based on 2016 stats released by the Bureau of Labor Statistics, which include all expenses related to food, transportation, healthcare, personal insurance and pensions, entertainment, and all other expenditures. RENTCafé only adjusted the annual food costs in order to exclude the amount spent on festive foods (which is part of the winter holiday-specific expenses). The cost of living obtained this way represents 46% out of a household’s gross income (before taxes), and RENTCafé considered the same proportions to be valid for each city.
• As the holiday-related expenses were calculated for the last two months of the year, RENTCafé also adjusted all other indicators to reflect two months’ values.

To see how you will close the year after the holiday spending with RENTCafé's handy calculator, or to find your city in their interactive table with data on the 50 largest U.S. cities, click here.

>>> Graphics courtesy of RENTCafe.com, top image by Anna Dziubinska on Unsplash