Income as a Fundamental Driver of Rental Pricing: Evidence from Ten U.S. Metropolitan Markets

Hana Nguyen (), Carlos Nunez () and Norman Chung ()
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Hana Nguyen: California State University at Northridge, Department of Business Law
Carlos Nunez: Chapman University, Department of Finance
Norman Chung: California State University at Northridge, Department of Business Law

A chapter in Business and Sustainable Development in a Globalized and Digitalized Era, 2026, pp 90-107 from Springer

Abstract: Abstract This paper analyses the relationship between median household income and market asking rent per unit across ten major U.S. metropolitan areas (MSAs) using CoStar 2005–2023 time-series data and linear regression techniques. Income explains over 92% of rent variation across markets, highlighting its value as a fundamental predictor of multifamily rent levels. The analysis demonstrates a consistently strong income–rent relationship across diverse metropolitan contexts. This study offers valuation practitioners (e.g., appraisal professionals, financial analysts) a practical and empirically grounded framework to support the market rent estimates embedded in the income approach valuations. By anchoring rent conclusions in income trends, especially in volatile or data-limited markets, valuation practitioners can enhance credibility and address affordability challenges. This research provides a replicable tool that bridges academic insights and real-world asset valuation practice.

Keywords: Valuation modelling; Market analysis; Market rent; Household income; Rental pricing; Income approach; Real estate valuation; Housing demand; Rent affordability; Multifamily appraisal (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-032-29346-6_5

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DOI: 10.1007/978-3-032-29346-6_5

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