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

In: Business and Sustainable Development in a Globalized and Digitalized Era

Author

Listed:
  • 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)

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.

Suggested Citation

  • Hana Nguyen & Carlos Nunez & Norman Chung, 2026. "Income as a Fundamental Driver of Rental Pricing: Evidence from Ten U.S. Metropolitan Markets," Springer Proceedings in Business and Economics, in: Zafar U. Ahmed & Nhat Tan Pham (ed.), Business and Sustainable Development in a Globalized and Digitalized Era, pages 90-107, Springer.
    • Handle: RePEc:spr:prbchp:978-3-032-29346-6_5
    DOI: 10.1007/978-3-032-29346-6_5
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