What Was Rent in 1985 and How It Compares to Today's Housing Costs

The rental market has undergone a seismic transformation over the past four decades. The $432 monthly rent that renters were paying in 1985 seems almost quaint compared to today’s realities, yet this seemingly modest figure tells a profound story about American housing economics and the erosion of affordability for middle-class families.

The 1985 Rent Crisis and Its Origins

To understand how we arrived at today’s housing crisis, we must look back at the turbulent 1970s. That decade brought a recession that fundamentally disrupted the rental market’s balance. According to the Harvard Joint Center for Housing Studies, by 1980, the cost burden rate had reached 35%, with more than half of renters experiencing severe financial strain. The relative affordability of the 1960s and early 1970s had evaporated almost entirely.

By 1985, renters were already struggling. The median monthly rent had climbed to $432—a 78% increase from the $243 median monthly rent just five years earlier in 1980. This wasn’t a gradual shift but a rapid acceleration that caught many households off-guard.

Tracking Rent Increases Since 1985

The trajectory from 1985 onward reveals a relentless upward spiral. Data from iPropertyManagement shows that average rent prices have surged approximately 9% annually since 1980, a growth rate that consistently outpaces inflation and wage increases by a substantial margin.

When measured in concrete terms, this trajectory becomes even more striking. The $432 monthly rent of 1985 had escalated to $1,388 by August 2022. This represents a 221% increase in less than four decades. For perspective, a $1,955 monthly rent would be roughly equivalent in purchasing power terms to what renters were paying in 1985, yet actual market rents have continued climbing well beyond this threshold.

To contextualize the era being discussed, consider what groceries cost in the mid-1980s: consumers were paying approximately $1.59 for a gallon of 2% milk in Iowa (1987), around $0.39 per pound for apples in Wyoming (1986), and $1.39 per pound for ground beef in New York (1980). These baseline costs illustrate how the entire cost of living has shifted, with housing increasingly dominating household budgets in ways it didn’t during the 1985 era.

When Salaries Couldn’t Keep Up with Rising Rents

The most troubling aspect of this housing story emerges when comparing rent trajectories to income growth. According to Consumer Affairs, when adjusted for 2022 inflation, the average annual income in the U.S. for 1980 was $29,300. By the fourth quarter of 2023, the national average salary had reached $59,384 according to USA Today. While nominal income roughly doubled, this growth fails to match rent escalation.

A renter earning the inflation-adjusted equivalent of 1980’s average income would be paying roughly 20% of their annual salary on rent based on 1985 prices. Today, even with nearly doubled nominal salaries, renters find themselves dedicating far larger income portions to housing. The math simply doesn’t work in their favor.

The Burden on Modern Renters

By 2022, the situation had reached critical proportions. TIME reported that half of all American renters had become cost-burdened, spending more than 30% of their income on housing—the threshold that signals unaffordable housing. Even more alarming, over 12 million people were spending at least 50% of their paychecks on rent, leaving minimal resources for food, healthcare, transportation, and savings.

The contrast is stark: in 1985, when rent was $432 monthly, a worker earning the median income could allocate a reasonable percentage of earnings to housing. Today, despite earning substantially more in nominal dollars, renters face a far more precarious situation. The 1985 benchmark, while challenging for many at that time, represents a fundamentally different economic reality than what contemporary renters navigate. Housing has transformed from a manageable expense to an increasingly dominant budget item that threatens financial stability and upward mobility for millions of middle-class Americans.