The housing affordability crisis has made homeownership unattainable for many Americans. According to a report from the National Association of Realtors and Realtor.com, over 75% of homes on the market are too expensive for middle-class buyers, Markets Insider reported.
Rent prices have skyrocketed too. The National Low Income Housing Coalition’s (NLIHC) Out of Reach study found that the national one-bedroom Housing Wage is $23.67, which is more than three times the federal minimum wage. The Housing Wage is the hourly wage a person working full-time needs to earn to afford a rental home at the U.S. Department of Housing and Urban Development’s (HUD) fair market rent without spending more than 30% of their income. For a modest two-bedroom apartment, the national Housing Wage is $28.58 per hour.
Some states and areas of the country are significantly more expensive than others. New York is notoriously pricey, but California, Hawaii and Massachusetts rank higher on the NLIHC list by two-bedroom rental home Housing Wage.
According to the NLIHC, the fair market rent for a two-bedroom apartment in California is $2,197. To afford the rent and utilities, a household must earn $42.25 per hour working full-time, $7,323 monthly or $87,877 annually. The average renter’s wage is only $33.67 per hour, which is well above the state’s minimum wage of $15.50. If a renter worked a minimum wage job, they would need to work 109 hours per week to afford a two-bedroom apartment in California.
The fair market rent for a two-bedroom apartment in Hawaii is $2,175, and a household must earn $41.85 per hour working full-time, $7,251 monthly or $87,013 annually. The state’s minimum wage is $12 per hour, but the average renter earns $21.86 per hour. The most expensive metropolitan area in Hawaii is urban Honolulu, with a Working Wage of $43.21 per hour, followed by Kauai country at $41.31 per hour.
In Massachusetts, the fair market rent for a two-bedroom apartment is $2,165. To afford rent and utilities, a household must earn at least $41.64 per hour, $7,218 monthly or $86,613 annually. The state’s minimum wage is $15 per hour, but the average renter earns $29.40. The Boston-Cambridge-Quincy area is the most expensive, with a Housing Wage of $50.67. To afford a two-bedroom rental home, you would need to work 111 hours per week at minimum wage.
New York’s fair market rent for a two-bedroom apartment is $2,084. To afford rent and utilities, a household must earn $40.08 per hour working full-time, $6,948 monthly or $83,375 annually. New York’s minimum wage is $14.20 per hour, but the average renter earns $34.46. Working 40 hours per week at a minimum wage job, renters could only afford $738 per month and would need to work 113 hours per week to afford a two-bedroom rental home.
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