Top Cities for Affordable Housing for Minimum Wage Earners
Renters across the U.S. have a reason to celebrate: rents declined in November, making housing more accessible for many—especially those earning minimum wage. Affordability is a big concern. Cities and affordability, along with crime in major cities, the new president in Jan won on the issue.
According to a recent Realtor.com® report, the median rent across the 50 largest metropolitan areas was $1,703, down $17 from last month and $57 from its peak in August 2022. The median rent for 0-2 bedroom properties dropped by $19 year over year, or 1.1%, marking a hopeful trend in rental affordability.
As the rental market has cooled, rents have fallen for 16 consecutive months nationwide, says Realtor.com economist Jiayi Xu in her analysis.
But how much relief will this drop bring to renters, especially in cities where affordability remains challenging? It might be substantial, especially considering that the minimum wage is set to rise in 2025.
Nationwide Rent Declines
Renters saved across the board last month, with smaller properties seeing the most significant percentage drops in rents. This makes finding a place to call home more affordable. However, affordability is still an issue whether in a major city or a suburb.
Studio Apartments Median rent fell by 1.6% year over year to $1,423, a $67 decrease from its peak in October 2022.
One-Bedroom Units: Median rents dropped 1.2% to $1,585, $73 below their August 2022 peak.
Two-bedroom units Median rents decreased by 1.1% to $1,886, $75 less than their high in August 2022.
While these declines are welcome news, Xu notes that rents have risen significantly since before the COVID-19 pandemic. However, these increases pale compared to other economic shifts during the same period.
For example, while the typical rent in November 2024 was $261 (18.1%) higher than in 2019, overall consumer prices jumped 22.7% in the same timeframe. The rent rise also falls short of the 49.7% increase in the median price per square foot for homes for sale during the past five years.
SMinimumwage increases in 23 of the top 50 metropolitan areas are expected to bprovide much-needed relief starting Jan. 1, 2025
Minimum-Wage Workers Still Struggle With Affordability
Even with falling rents, minimum-wage earners face ongoing challenges when affording housing.
The Realtor.com® analysis found that minimum-wage renters still need to clock significant hours in cities with the largest rent declines to afford a typical 0-2 bedroom rental. Using the 30% rule of thumb for housing affordability, the report calculated the weekly hours necessary for two renters to split the rent equally.
In 8eightof the ten markets analyzed, two minimum-wage workers splitting the rent would still need to work more than 40 hours per week to keep housing costs within budget—especially in areas where the minimum wage remains at the federal rate of $7.25 per hour.
Best and Worst Cities for Minimum-Wage Renters
Cities like Nashville, TN, and Austin, TX, lead the list in the number of hours minimum-wage earners need to work to afford typical rents. Here’s how they compare:
– Nashville, TN: Two minimum-wage earners must work an untenable 82 hours per week.
– Austin, TX Workers must clock in 79 hours weekly.
On the other hand, cities like Minneapolis and Seattle offer a glimmer of hope for minimum-wage renters:
– Minneapolis, MN: Two earners can afford typical rent by working about 37 hours per week.
– Seattle, WA: With its higher minimum wage of $19.97 per hour, renters can cover housing costs with fewer hours despite higher rents.
Relief on the Horizon for 2025
If rents remain consistent with November 2024 levels, upcoming minimum wage increases in several markets will reduce the hours needed for renters to afford housing. Leading this relief are:
– St. Louis, MO, and Kansas City, MO Minimum-wage workers in these cities will save approximately four work hours per week once the wage hikes occur.
The scheduled increases will further improve affordability for renters in cities like Minneapolis and Seattle, where higher minimum wages already ease the burden.
How Gibson Sotheby’s Can Help
Navigating the rental and housing markets can be complex, especially when affordability and relocation are factors. At Gibson Sotheby’s International Realty, we are part of a robust national and global network that helps clients find housing solutions tailored to their needs—no matter where they’re headed. Whether you’re looking to rent, buy, or invest, our expertise extends beyond Boston and the Lakes Region of New Hampshire. We can connect you to trusted professionals across the U.S. and worldwide, ensuring you have the support you need to make informed decisions. If you are relocating, contact me, and I am happy to help make the search easier. Isn’t it time someone helps you without costing you something for that help up front?
What Rent Declines Mean for the Future
The sustained rent decline is a win for renters and could signal broader economic improvements. According to Xu, this trend should lead to slower shelter inflation, alleviating a major driver of rising costs. However, challenges remain, particularly in regions with federal minimum wages that lag behind housing costs.
The disparity in affordability underscores the importance of strategic planning when considering housing options. With Gibson Sotheby’s International Realty by your side, you’ll have access to the resources, insights, and support you need to find a home that works for your budget and lifestyle—anywhere in the world. If you are looking to relocate to anywhere in the United States or anywhere around the globe, contact me and let me take a weight off your shoulders and find an agent for you and introduce you to that great agent who knows that local market well and best of all the introduction will cost you nothing.
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