Rent Out of Reach for Many Americans
The rental picture is getting more grim for many Americans working full time on local minimum wage. In fact, according to a new study from the National Low Income Housing Coalition, there isn't a single state where a minimum-wage worker working 40 hours a week can afford even a one-bedroom rental.
Read more: Why Renters Can’t Make the Move
The study also reveals that the wage needed to afford a modest two-bedroom rental in the U.S. is $20.30 per hour.
To put this in perspective, "The average hourly wage for Americans is actually $15.42 per the report, which is not nearly enough to afford a two-bedroom," says CityLab in its analysis of this study. "And the federal minimum wage, at $7.25, is around a third of what’s required. That means minimum-wage workers would have to work three jobs, or 112 hours a week, to be able to afford a decent two-bedroom accommodation."
Average Americans wanting to buy a home are feeling stifled by the rental affordability problem as well. "Rising rents are making it difficult for potential first-time buyers to become owners, especially since rent increases are outpacing wage gains," says Lawrence Yun. "That means more of a tenant’s income is being eaten up in rent, making it harder to save for a down payment."
Since the price of rentals and hourly wages varies by state, the National Low Income Housing Coalition created a map showing the minimum wage needed to afford a two-bedroom in each state:
Source: "The Hourly Wage Needed to Rent a 2-Bedroom Apartment Is Rising," CityLab (May 25, 2016)
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