You may have heard that you shouldn’t spend more than one-third of your income on rent.
In fact, some leasing offices will even check your pay stubs to make sure you’re not overextending yourself before you sign that lease. In theory, this is a great idea.
But this formula falls into the “easier said than done” category because, as rents continue to rise, salaries struggle to keep up.
Case in point: The 2023 national housing wage is $28.58 per hour for a modest two-bedroom rental home and $23.67 for a modest one-bedroom rental home, according to the National Low Income Housing Coalition (NLIHC).
But because location so heavily influences rental rates, there are some extremes.
For example, you’d have to earn almost $42.25 per hour in California to afford a two-bedroom rental, according to the map and study from the NLIHC that looked at rental rates in 2023.
On the lower end of the scale, you’d need to earn $16.27 per hour in Arkansas to afford a two-bedroom apartment.
Here’s where things get tough. The federal government mandates a nationwide minimum wage of $7.25 per hour.
In addition, the demand for low-cost rentals far exceeds the supply that’s available. According to HHIC, there were only 34 affordable rental units available for every 100 extremely low-income renters.
What you need to earn on a state-by-state basis
Here is the hourly wage that a household must earn in order to afford the “fair market rent” (FMR) for a two-bedroom rental unit without having to hand over more than 30 percent of their income.
California – $42.25
Hawaii – $41.83
Massachusetts – $41.64
New York – $40.08
Washington – $36.33
Wyoming – $36.33
District of Columbia – $35.35
New Jersey – $33.5
Colorado – $32.13
Connecticut – $31.93
Maryland – $31.08
Florida – $30.59
Arizona – $29.93
New Hampshire – $29.86
Oregon – $29.72
Nevada – $27.99
Rhode Island – $27.78
Virginia – $26.84
Alaska – $26.32
Delaware – $26.09
Vermont – $25.54
Texas – $25.06
Utah – $24.93
Georgia – $24.75
Maine – $24.73
Illinois – $24.59
Minnesota – $24.11
Pennsylvania – $23.61
Michigan – $21.65
North Carolina – $21.54
Idaho – $21.53
South Carolina – $21.38
Tennessee – $20.76
Wisconsin – $20.32
New Mexico – $19.88
Louisiana – $19.39
Montana – $19.28
Ohio – $19.09
Indiana – $19
Nebraska – $18.91
Kansas – $18.71
Missouri – $18.54
Alabama – $18.13
Iowa – $18.13
Oklahoma – $18.00
Kentucky – $17.90
North Dakota – $17.79
South Dakota – $17.49
Mississippi – $17.21
West Virginia – $16.64
Arkansas – $16.27
These numbers assume you work for 40 hours a week and 52 weeks a year.
You can also check out this map, which shows how many hours per week minimum wage workers need to log in order to afford rent in a one-bedroom apartment. Some shockers? You’d have to work 107 hours per week in Hawaii, 98 in New York, 92 in Florida, and 91 in Massachusetts. (For context, each week contains 168 hours.)
Where on the scale does your state stand?
This story was originally published at Don’t Waste Your Money.
