From San Jose to Boston, find out which urban areas are experiencing a rental market crunch.
This Is How Much You Need To Buy a $416,880 Home With a 6.6% RateRenters across the US have something to cheer about: Rents declined in November, making it a bit more affordable for many—especially those earning minimum wage .
“As the rental market has cooled, rents have fallen for 16 consecutive months nationwide,” says Realtor.com economist Jiayi Xu in her analysis. Despite these declines, Xu’s analysis reveals that rents have risen significantly since before the COVID-19 pandemic. Still, the increase isn’t as dramatic when compared with other economic changes over the same time.
To come up with its findings, the Realtor.com data team analyzed how many hours someone earning minimum wage needed to work to afford a typical 0-2 bedroom rental in November. Using the 30% rule of thumb for housing affordability, the team calculated the annual income required and determined the weekly hours necessary. The analysis assumed two renters splitting the rent equally.
In cities such as Denver and Phoenix, however, two minimum-wage earners with fewer than 40 hours of work per week can afford a typical 0-2 bedroom.Nashville, TN, and Austin, TX, lead the list in the highest number of hours minimum-wage earners need to clock in to afford the typical rent.In Minneapolis and Seattle, they need to work approximately 37 hours per week to cover the cost of a similar rental unit.
“With scheduled minimum-wage increases in more markets throughout the year and a projected 0.1% year-over-year decline in median asking rents for 2025, these changes could offer more relief to minimum-wage earners,” says Xu.“The relative steadiness in rents should translate into slower shelter inflation in the months ahead, alleviating one of the biggest recent drivers of a rising price level,” says Xu.
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