The Department of Housing and Urban Development defines those who pay more than 30% of their income on rent as housing cost-burdened. Generally known as the 30% rule, this HUD guideline has long been a rule of thumb for household budgeting. As rising rents continue to outpace increases in median incomes in most cities, having a roommate can be a great way to decrease the amount of income you spend on rent, and in turn boost your savings. Sharing your home with a roommate is often less expensive than living alone as the cost split between two individuals for a two-bedroom apartment is generally less than the cost of a one-bedroom apartment.
In this study, SmartAsset looked at the cities where living with a roommate translates to the greatest savings. We examined the average rent for a one-bedroom apartment and compared it to the average rent for a two-bedroom apartment for 50 U.S. cities. We then measured the cost difference between renting a one-bedroom alone and renting a two-bedroom with a roommate. For details on our data sources and how we put all the information together to create our final rankings, check out our Data and Methodology section below.
This is SmartAsset’s fifth annual study on how much a roommate saves you. Read the 2018 version here.
Key Findings
- A wide range. There is a wide range in roommate savings across the 50 big cities we considered. The amount per month saved by having a roommate in San Francisco is roughly $500 more than the average saved across all cities and almost $900 more than the amount saved in the last city on our list, Detroit, Michigan.
- Southern California popularity. While savings from having a roommate may be expected in pricey Northern California, which has three representatives in our top 10, Southern California matches this total. Los Angeles, San Diego and Long Beach all have average savings of more than $650 per month associated with sharing an apartment rather than living alone.
1. San Francisco, CA
City dwellers who choose to share an apartment with a roommate save the most on average in San Francisco, California. According to our data, the average one-bedroom apartment in San Francisco is $3,361 per month. In comparison, the average two-bedroom apartment is $4,529. This translates to a savings of $1,096 for residents who choose to share an apartment and split rent.
Even for residents sharing an apartment in San Francisco, rent is much higher than in any other city. The average two-bedroom apartment in San Francisco is $812 more per month than the average two-bedroom apartment in New York. This means that roommates here will still be spending an additional $400 per month on average than roommates in living in New York.
2. New York, NY
The most populous city in the U.S., New York, New York, follows San Francisco as the second city where a roommate saves you the most. Roommates save on average $1,056 per month each, or about $12,600 per year each. This means that together two roommates have a combined savings of more than $25,000 annually. Given the sheer number of people, finding a roommate in New York should not be difficult. Take a look at our top roommate finders if you need some help.
3. San Jose, CA
San Jose, California is the third city on our list this year and the last city where savings from having a roommate exceed $1,000 per month. According to our data, the average one-bedroom apartment costs $2,624 per month, while the average two-bedroom apartment costs $3,238 per month. In annual terms, residents can expect to spend about $31,500 a year on a one-bedroom apartment or almost $39,000 a year on a two-bedroom apartment, which is a significant portion of income. However, split between two roommates, the annual cost of a two-bedroom apartment per person is about $19,500. While $19,500 is not insignificant, it is much more feasible for most people in San Jose.
4. Boston, MA
Boston, Massachusetts comes in fourth on our list, one spot lower than in our 2018 study. In terms of rent, Boston is slightly more expensive than San Jose. The average one-bedroom apartment in Boston is $2,721 per month and the average two-bedroom apartment is $3,457. In comparison to San Jose, rent in Boston is almost $100 more per month for a one-bedroom apartment and more than $200 more per month for a two-bedroom apartment. However, roommates stand to save slightly less in Boston than San Jose on average. We estimate that the average savings per month for roommates in Boston is $993, or $11,911 annually. In San Jose, the average savings per month for roommates is $1,005, or $12,059 annually.
5. Oakland, CA
Oakland, California holds its fifth-place spot from last year and continues to outrank the more populous California cities of Los Angeles and San Diego in terms of roommate savings. Roommate savings are higher in Oakland partially because average rent prices are higher. A one-bedroom apartment in Oakland on average costs $2,548 per month. In comparison, a one-bedroom apartment in Los Angeles or San Diego on average costs $2,421 or $1,907 per month, respectively. Similarly, a two-bedroom apartment in Oakland costs an average of $3,320 per month while two-bedroom apartments in Los Angeles and San Diego cost an average of $3,244 and $2,357 per month, respectively. The average savings per month for roommates in this Bay Area city is $888, which is $10,662 annually.
There are other options besides sharing housing for single-occupant households in Oakland, however, as it is one of the top 10 cities where singles are actually choosing to buy over rent.
6. Los Angeles, CA
Rent in Los Angeles, California has risen over the year of data we considered. There was an increase of more than $200 per month for both one- and two-bedroom apartments. Given the rising housing costs in Los Angeles, pairing up with a roommate could be a good idea. We estimate using the average rent prices from April 2018 to April 2019 that roommates in Los Angeles, California could save on average almost $800 per month each.
7. San Diego, CA
Even though residents of San Diego, California have to put a lot of work into paying rent, they do encounter much lower rent prices than Oakland and Los Angeles. The average one-bedroom apartment in San Diego, California is less than $2,000 a month, and the average two-bedroom apartment is less than $2,400 a month. Some residents may forego sharing an apartment because of the relatively low rent prices as compared to other cities in California, but roommates still save about $728 per month, or $8,742 annually, compared to residents living alone.
8. Washington, DC
Average rent prices in Washington, D.C., which ranks eighth, are higher than those in San Diego, though roommates save slightly less. In Washington, the average one-bedroom apartment is $2,101 per month and the average two-bedroom apartment is $2,766. This translates to an average savings of $718 per month. In annual terms, two roommates in the District of Columbia who are sharing an apartment save more than $8,600.
9. Miami, FL
Like San Diego, the average one-bedroom apartment in Miami, Florida is less than $2,000 a month. According to our data, the average one-bedroom apartment costs $1,894 per month while the average two-bedroom apartment costs $2,476 per month. Thus, sharing an apartment translates to a savings of $656 per month per person. Residents choosing to share a one-bedroom apartment stand to save even more. Splitting the average Miami one-bedroom monthly rent in half, each person would instead pay $947 per month.
10. Long Beach, CA
Long Beach, California jumps into the top 10 this year after ranking 11th in our study last year. Long Beach offers one-bedroom apartments that have an average monthly rent of $1,934 and two-bedroom apartments with an average monthly rent of $2,563. These rent prices are close to half of the monthly rent for one- and two-bedroom apartments in San Francisco. Roommates who choose to share a two-bedroom apartment instead of each paying for a one-bedroom apartment will save about $653 per month per person.
Data and Methodology
In order to find the cities where a roommate saves you the most, we looked at data on the 50 largest U.S. cities. We compared them across the following two metrics:
- Average rent for a one-bedroom apartment. Data comes from Rent Jungle and covers rent prices from April 2018 to April 2019.
- Average rent for a two-bedroom apartment. Data comes from Rent Jungle and covers rent prices from April 2018 to April 2019.
We measured how much a person could save in each city by moving from a one-bedroom apartment to a two-bedroom apartment. To do this, we compared the cost of a one-bedroom to half the cost of a two-bedroom for each city, to account for living with a roommate. We ranked the cities according to where the savings were the largest.
Tips for Managing Your Savings
- Invest early. An early retirement requires early planning. By planning and saving early you can take advantage of compound interest. Take a look at our investment calculator to see how your investment can grow over time.
- Buy or rent? – When you’re moving to a new city, you need to decide if you are going to rent or buy. If you are coming to a city and plan to stay for the long haul, buying may be the better option for you. On the other hand, if your stop in a new city will be a short one, you’ll likely want to rent. A professional advisor might be able to help you assess your options and choose the best plan of action. Though finding the right financial advisor that fits your needs might seem hard, it doesn’t have to be. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
Questions about our study? Contact us at press@smartasset.com
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