Story at a glance
- A new report revealed that American workers making an average hourly wage must work more hours than before the pandemic to cover the typical monthly rent.
- Workers need to work close to six hours more each month to pay their rents.
- The typical monthly rent in the U.S. is $2,040.
American workers earning average wages need to put in more hours than before the pandemic to afford rent as monthly rental costs have far outstripped earnings.
A new report from the real estate company Zillow revealed that workers nationwide making an average hourly wage must work close to 63 hours before earning enough to cover typical monthly rents that average $2,040. This is about six hours more than was needed prior to the pandemic.
Over the past five years rents have increased by about 37 percent while wages have grown by 23 percent over the same period. And although rental growth has slowed recently after rising each month for two years, renters have yet to feel real relief as prices are still higher than last year, according to Jeff Tucker, a senior economist at Zillow.
“Rents were growing at a record pace for much of 2021, squeezing budgets for renters moving or renewing leases,” Tucker said in a media release.
“Now, it appears more people are opting to double up with roommates or family, which means more vacancies and pressure on landlords to price their units competitively, offering some hope of relief on the horizon,” Tucker added.
The Sun Belt — comprised of the South and Southwest regions — where workers flocked during the pandemic, have been hit particularly hard by rent growth. Workers in Miami now need to clock 24 hours more to pay rent than before the pandemic. And in Tampa, workers need an extra 20 hours.
But the report found that rents in three markets are now easier to pay than in 2019 — San Jose, Boston and San Francisco. Still, rents in these metros are among the highest in the country.
Rent growth slowed for the first time in October, falling by 0.1 percent after years of massive growth. Yet rents have risen by 9.6 percent since last year.
“Rents fell last month for the first time in two years, possibly the start of more price drops to come, or at least a signal that we are back to the usual seasonal rhythms of the rental market,” Tucker added.
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A separate report from Realtor.com shows that renters are struggling to pay their housing costs, despite the price slowdown. And landlords, who are also dealing with price hikes, are planning to increase rents in the coming months.
“High inflation and the cost of upkeep and repairs are hitting landlords, who have had to raise rents to cover their higher cost of owning the properties and making it unlikely that they’ll be open to negotiating with new tenants,” Ryan Coon, vice president of rentals at Realtor.com, said in a media release.
Yet landlords are more likely to negotiate rent costs with those renewing leasing than with new renters. About 22 percent said they would consider negotiating with tenants who are renewing a lease.
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