As it stands right now in this nation, the working class can no longer easily afford to rent even the most modest of accommodations, according to the National Low Income Housing Coalition.
At the worst, there are no states where one can work a standard 40-hour work week at minimum wage and afford a one-bedroom rental unit at the average fair market rent; at least not without paying more than 30% of their income, according to the below factsheet from the coalition.
By now most people heard about the incredible rising prices in places like California, home prices are going up all across the nation. In fact, while home prices only increased a meager 1.3% in the first quarter of 2016, it’s added onto a long string of increases; 19 consecutive quarterly price increases to be exact.
Now, in order to rent a two-bedroom apartment, the average person would need to earn at least $20.30 per hour. In six states and the District of Columbia, they would need to earn over $25 per hour.
The national minimum wage is $7.25 per hour, and the average renter makes an average of $15.42/hour (before taxes).
This chart shows how much someone would need to make in each state in order to afford the rent for an average two-bedroom unit:
Click to Enlarge
(Source: National Low Income Housing Coalition)
The other option is that renters work more hours to afford where they live, but the average renter would need to work 90 hours at minimum wage to afford a one-bedroom rental home at the fair market rent, and 112 hours to afford a two-bedroom.
This chart shows how many hours one would need to work at minimum wage in order to afford a one-bedroom unit:
Click to Enlarge
(Source: National Low Income Housing Coalition)
In short, renting on a minimum wage income just isn't possible. The number of first-time homebuyers, however, continues to rise. Lower down payments continue to be an option for first-time homebuyers as JPMorgan Chase just laid out a 3% down program, following in the footsteps of Wells Fargo and Bank of America, who also both recently announced their 3% down programs.
