About the Report
For more than 35 years, the National Low Income Housing Coalition’s (NLIHC) Out of Reach report has called attention to the disparity between wages and the cost of rental housing in the U.S. Every year the report has shown that affordable rental homes are out of reach for millions of low-wage workers, seniors, families, and other renters. The report’s central statistic, the Housing Wage, is an estimate of the hourly wage a full-time worker must earn to afford a modest rental home at HUD’s fair market rent (FMR) without spending more than 30% of their income on housing costs – the accepted standard of affordability. The FMR is an estimate of what a family moving today can expect to pay for a modestly priced rental home in a given area.
Housing Is Out of Reach
For far too long, accessible, safe, and affordable housing has been out of reach for millions of the nation’s lowest-income renters. Although most indicators show that the U.S. economy is strong, the lowest-income renters continue to confront significant challenges finding and maintaining access to safe and affordable rental housing. Insufficient wages, rising rents, and an inadequate housing safety net all contribute to the problem. Only sustained, long-term federal investments in affordable rental housing can ensure that the lowest-income renters have affordable homes.
In no state, metropolitan area, or county in the U.S. can a full-time worker earning the federal minimum wage, or the prevailing state or local minimum wage afford a modest two-bedroom rental home at fair market rent. In 2024, a full-time worker needs to earn an hourly wage of $32.11 on average to afford a modest, two-bedroom rental home in the U.S. and $26.74 to afford a modest one-bedroom rental home.
The Housing Wage for a two-bedroom home is 4.4 times higher than the federal minimum wage of $7.25, which has remained unchanged since 2009. Thirty states, the District of Columbia, and Puerto Rico, however, have minimum wages that are higher than the federal minimum wage. State minimum wages range from $8.75 in West Virginia to $17.50 per hour in the District of Columbia. Fifty-eight localities also set higher minimum wages. Even when factoring in higher state and county-level minimum wages, though, the average minimum-wage worker in the U.S. must still work 113 hours per week (2.8 full-time jobs) to afford a two-bedroom rental home at fair market rent, or 95 hours per week (2.4 full-time jobs) to afford a one-bedroom rental home at the fair market rent.
The affordability of rental housing is a challenge not just for minimum-wage workers. The average hourly wage earned by renters is $23.18 in 2024, which is $8.93 less than the two-bedroom Housing Wage of $32.11 and $3.56 less than the one-bedroom Housing Wage of $26.74. In 49 states, full time workers earning the average hourly wage for renters in their state earn less than their state’s two-bedroom Housing Wage. North Dakota is the only state where a renter earning the average hourly renter’s wage can afford a two-bedroom rental home at fair market rent. In 33 states, workers earning their respective average hourly renter wage earn less than their state’s one-bedroom Housing Wage. Even for efficiency style rental homes (studios), the average hourly wage for renters falls short of the Housing Wage in 25 states.
In most areas of the U.S., a family of four with poverty-level income can afford a monthly rent of no more than $780, and many cannot even afford that. An individual relying on federal Supplemental Security Income (SSI) can only afford a rent of $283 per month. The national average fair market rent for a one-bedroom home of $1,390 per month and $1,670 for a two-bedroom home, far from affordable for a family in poverty or a person relying on federal assistance.
More than 50% of wage earners cannot afford a modest one-bedroom rental home at the FMR while working one full-time job. More than 60% of wage earners cannot afford a modest two-bedroom rental home while working one full-time job. Of the nation’s 20 most common occupations, 14 of them pay median wages lower than the wage needed by a full-time worker to afford a modest one-bedroom apartment. These 14 occupations account for more than 64 million workers, or 42% of the workforce. For example, the median hourly wages of food servers and retail workers are $14.85 and $15.73, respectively — significantly less than the full-time wage of $26.74 needed to afford a one-bedroom apartment at the FMR.
The Federal Policies Needed to End the Housing Crisis
Despite rising wages, cooling inflation, and low unemployment, low-wage workers and other renters continue to struggle with the cost of rent. Addressing this challenge requires long-term federal investments in affordable housing. As evidenced during the COVID-19 pandemic, federal policies and resources can play a pivotal role in establishing a robust housing safety net, preventing evictions and homelessness, and mitigating housing instability among renters with the lowest-incomes. Establishing a federal housing safety net for the long term will require sustained investments to expand both short- and long-term rental assistance, build new deeply affordable housing, preserve the existing stock, and provide stronger renter protections.
First, Congress must invest in long term housing solutions to expand and preserve the supply of affordable housing. This includes expanding the national Housing Trust Fund to build and preserve affordable housing, as well as investing directly in public housing capital repairs. Second, Congress should expand access to rental assistance to every eligible household in need with Housing Choice Vouchers. Universal rental assistance could be achieved by fully funding the Housing Choice Voucher program. Third, Congress must strengthen and enforce renter protections. These protections include providing legal counsel to renters facing eviction, prohibiting the reporting of evictions and rental debt on consumer reports, establishing anti-rent gouging protections, eliminating arbitrary screening policies to ensure housing access for people exiting the criminal justice system, and supporting “just cause” eviction standards. Renter protections are also needed to protect renters from discrimination, including discrimination based on source of income, military or veteran status, sexual orientation, gender identity, and marital status. Fourth, Congress needs to create a permanent national housing stabilization fund to provide financial assistance to families who experience a sudden and temporary financial setback. Temporary assistance can help renters stay housed and prevent the many negative consequences associated with evictions and homelessness.
Affordable housing remains out of reach for millions of renters in the U.S. despite a strong economy. Those with the lowest incomes endure the greatest challenges in the face of growing housing costs and a combination of insufficient wage growth and an inadequate housing safety net. Congress must act immediately to expand rental assistance, provide short-term emergency housing assistance, build and preserve deeply affordable rental homes, and enact and enforce robust renter protections.