The Out of Reach report reveals a significant gap between rental prices and wages, complicating the transition from renting to homeownership. An hourly wage of $33.63 is required for a two-bedroom rental and $28.17 for a one-bedroom. Many renters earn less than these amounts, making housing unaffordable in many metro areas. A majority only afford one-bedroom rentals at the 60th wage percentile, while the 70th percentile secures two-bedroom rentals. In states with federal minimum wage, workers need multiple jobs for affordable rents, illustrating the affordability crisis faced by many renters.
The annual Out of Reach report from the National Low Income Housing Coalition shows why making the jump from renting to owning has been so tough for many Americans.
NLIHC calculates that to afford a modest two-bedroom rental, one would need to make an hourly wage of $33.63, while a one-bedroom rental requires $28.17.
Many renters do not earn the needed wages, with only the 60th percentile able to afford a one-bedroom rental, and the 70th percentile being required for a two-bedroom unit.
In states with the federal minimum wage of $7.25, minimum-wage workers require multiple jobs to afford even modest two-bedroom rentals at fair market rates.
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