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Minimum wage earners must work impossible number of hours to afford rent: report

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Published  February 26, 2025 3:17pm CST
Personal Finance
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What to expect from housing market in 2025

Corey Burr with Southeby's International Realty joined LiveNOW's Josh Breslow to talk about what to expect with the housing market in the new year.

The Brief

    • The $7.25 federal minimum wage has remained stagnant since 2009, but in 30 states, minimum wage is higher, which puts the average US minimum wage at $11.59 per hour.
    • Still, minimum wage earners need to work an impossible number of hours to afford the average rent for an apartment. 

A new analysis says the average minimum wage worker in the U.S. needs to work more than double what’s considered full-time hours to afford the median price of an apartment. 

According to Redfin, as a rule of thumb, people shouldn’t spend more than 30% of their income on housing. It’s a rule that’s been harder to follow as housing costs continue to soar. 

Despite many minimum-wage workers living in apartments with below-average rents, they’re still spending more than 30% of their income on rent. 

RELATED: These housing markets were the hottest in January

What’s the median price for an apartment in the US?

By the numbers:

The median price for an apartment in the US is $1,599, according to Redfin. 

The $7.25 federal minimum wage has remained stagnant since 2009, but in 30 states, minimum wage is higher than $7.25, which puts the average national minimum wage at $11.59 per hour for 2025. Still, the average minimum wage earner would have to work 106 hours a week to afford a $1,599 a month apartment.

A 'for rent' sign is displayed outside an apartment building on September 22, 2022 in Los Angeles, California. (Photo by Allison Dinner/Getty Images)

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Workers earning less than minimum wage tend to be young people, often in the service industry, and women make up a higher percentage of these workers than men, according to the U.S. Bureau of Labor Statistics.

What they're saying:

"It’s obviously not realistic for most people to clock into their job for over 100 hours a week, but this thought experiment shines light on the massive rental affordability gap between the average American and our country’s lowest earners," said Redfin Chief Economist Daryl Fairweather. "It’s virtually impossible for a minimum-wage worker to afford the typical apartment on their own, which is why many have to find ways to reduce their housing expenses, like living with roommates or family members, applying for a spot in public housing, or using Housing Choice Vouchers."

RELATED: Here's how much house $300K, $400K and $500K buys you in each state

Is it cheaper to rent or buy in 2025?

Dig deeper:

Whether you’re renting or buying a home in 2025, it’s likely putting an outsized dent in your wallet, depending on where you live. 

The 2025 Rental Affordability Report, released Feb. 6 by the real estate analytics firm ATTOM, shows that both owning and renting remain a challenge for average American workers, eating up between 25 to 60% of their wages.

RELATED: The most and least affordable cities for renters: Final 2024 data

Overall, it’s cheaper to own a single-family home than rent a 3-bedroom house in nearly 60% of the 341 markets analyzed. 

According to ATTOM, the most affordable rental markets are: 

  • Black Hawk County (Waterloo, Iowa)
  • Wayne County (Detroit, Michigan)
  • Genesee County (Flint, Michigan)
  • Jefferson County (Birmingham, Alabama)
  • Hinds County (Jackson, Mississippi)

The Source: This report includes information from Redfin and ATTOM. 

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