According to a study released by the National Association of Realtors, the average income of homeowners exceeds that of renters by more than 85%. The study found that income gaps are more pronounced in small and mid-sized cities compared with high-cost coastal markets, a pattern researchers have pointed to and explained.
Interestingly, the largest gaps do not appear in the most expensive cities. Instead, they are often found in college towns and smaller cities. The main reason is the relatively lower income of renters, as students and young workers make up a large portion of them, which lowers the average renter income in these areas.
In Iowa City, in the state of Iowa, for example, the income gap reaches around 195%. In Champaign–Urbana in Illinois, the gap stands at a similar level of about 191%. This is largely due to the high concentration of students who make up the majority of renters. Homeowners in these areas are typically older and often have established professional backgrounds, which further widens this financial disparity.
Other college towns show a similar trend. In Springfield, Massachusetts, for instance, homeowners earn about 171% more than renters. In Bloomington, Indiana, the gap reaches 167%, while in Ann Arbor, Michigan, it exceeds 160%.
