{"id":145886,"date":"2022-12-07T14:02:45","date_gmt":"2022-12-07T21:02:45","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=145886"},"modified":"2023-08-09T10:31:18","modified_gmt":"2023-08-09T16:31:18","slug":"how-long-it-takes-to-afford-rent-report","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-long-it-takes-to-afford-rent-report","title":{"rendered":"New Zillow Report Suggests Renters Must Work 63 Hours To Afford Rent In The U.S."},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC3878786063&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">A recent report from&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/hours-worked-to-pay-rent-31704\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Zillow<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;highlights the U.S. affordability crisis creatively. Rather than just focusing on the rapid price growth in rents across the country over the past couple of years, the report zooms in on the average number of hours a renter has to work per week to afford rent.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The report shows a stark disparity in rent affordability between the hottest U.S. housing markets and those that have&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/new-redfin-report-shows-which-housing-markets-are-gaining-and-losing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">remained steady<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;despite the countrywide pandemic rent growth trends.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">It Takes 62.6 Hours To Afford Rent<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">First, let\u2019s take a look at the averages. The typical U.S. renter now has to work 62.6 hours to afford the average U.S. rent of $2,040. Rents have grown at abnormally rapid rates since the pandemic started, with 17.2% average annual growth levels recorded in February 2022. And while the <a href=\"https:\/\/www.biggerpockets.com\/blog\/rent-growth-has-peaked\" target=\"_blank\" rel=\"noreferrer noopener\">rental market has cooled<\/a> somewhat since then, the current growth level of 9.6% (as of October 2022) still points to an affordability squeeze for renters that will take some time to ease off. Average wages are stagnating, and many renters are now opting to live with roommates or move in with family while they wait for the rental market to cool off enough to make renting sustainable.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, the data has important details that point to a more complex picture of the U.S. rental market. These details also suggest that real estate investors shouldn\u2019t freak out. Instead, they should carefully research their local market in order to understand how to price their rental units to make them more attractive to renters in their area.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">It\u2019s Been Like This For A Long Time<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The average number of hours a renter has to work to afford rent hasn\u2019t changed that much over the past decade. The U.S. rental market has been tough on renters for quite some time. A record high of 62.9 hours was recorded in 2015. So, while wages haven\u2019t grown fast enough to keep up with the unprecedented rent hikes seen during the pandemic, the overall trajectory for renters has been positive. In fact, in some parts of the country, notably in St Louis, Missouri, wage growth has kept up with rent growth almost exactly (32.2% and 32.3%, respectively). Investors should research the labor markets in their areas before setting rent prices and rent increases.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Secondly, not all areas of the U.S. are seeing the growing requirement to work more and more hours to afford rent. The Midwest remains an affordable region for renters, with several major cities requiring substantially fewer hours per week than the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/these-housing-markets-are-cooling-the-fastest\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">hot markets of Florida or Texas<\/span><\/a><span data-preserver-spaces=\"true\">. For example, the average renter in Milwaukee only needs to work 37 hours to afford rent.<\/span><\/p>\n\n\n<div class=\"tableauPlaceholder\" id=\"viz1670446522694\" style=\"position: relative\"><noscript><a href=\"https:\/\/www.zillow.com\/research\/hours-worked-to-pay-rent-31704\/\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" alt=\"HoursWorked \" src=\"https:\/\/public.tableau.com\/static\/images\/N6\/N6S9YYG65\/1_rss.png\" style=\"border: none\" title=\"\"><\/a><\/noscript><object class=\"tableauViz\" style=\"display:none;\"><param name=\"host_url\" value=\"https%3A%2F%2Fpublic.tableau.com%2F\"\/><param name=\"embed_code_version\" value=\"3\"\/><param name=\"path\" value=\"shared\/N6S9YYG65\"\/><param name=\"toolbar\" value=\"no\"\/><param name=\"static_image\" value=\"https:\/\/public.tableau.com\/static\/images\/N6\/N6S9YYG65\/1.png\"\/><param name=\"animate_transition\" value=\"yes\"\/><param name=\"display_static_image\" value=\"yes\"\/><param name=\"display_spinner\" value=\"yes\"\/><param name=\"display_overlay\" value=\"yes\"\/><param name=\"display_count\" value=\"yes\"\/><param name=\"tabs\" value=\"no\"\/><param name=\"filter\" value=\":revert=\"\/><param name=\"refresh\" value=\"yes\"\/><param name=\"filter\" value=\":linktarget=\"\/><\/object><\/div>\n<p>                <script type=\"text\/javascript\">                    var divElement = document.getElementById('viz1670446522694');                    var vizElement = divElement.getElementsByTagName('object')[0];                    if ( divElement.offsetWidth > 800 ) { vizElement.style.width='800px';vizElement.style.height='600px';} else if ( divElement.offsetWidth > 500 ) { vizElement.style.width='800px';vizElement.style.height='600px';} else { vizElement.style.width='100%';vizElement.style.height=(divElement.offsetWidth*1.77)+'px';}                     var scriptElement = document.createElement('script');                    scriptElement.src = 'https:\/\/public.tableau.com\/javascripts\/api\/viz_v1.js';                    vizElement.parentNode.insertBefore(scriptElement, vizElement);                <\/script><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">A renter in Detroit needs to work 44 hours. That\u2019s a stark contrast with the average renter in Miami who has to work a shocking 96 hours to afford their rent.<\/span><\/p>\n\n\n<div class=\"tableauPlaceholder\" id=\"viz1670446543980\" style=\"position: relative\"><noscript><a href=\"https:\/\/www.zillow.com\/research\/hours-worked-to-pay-rent-31704\/\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" alt=\"HoursWorked \" src=\"https:\/\/public.tableau.com\/static\/images\/M6\/M6YP4QF8J\/1_rss.png\" style=\"border: none\" title=\"\"><\/a><\/noscript><object class=\"tableauViz\" style=\"display:none;\"><param name=\"host_url\" value=\"https%3A%2F%2Fpublic.tableau.com%2F\"\/><param name=\"embed_code_version\" value=\"3\"\/><param name=\"path\" value=\"shared\/M6YP4QF8J\"\/><param name=\"toolbar\" value=\"no\"\/><param name=\"static_image\" value=\"https:\/\/public.tableau.com\/static\/images\/M6\/M6YP4QF8J\/1.png\"\/><param name=\"animate_transition\" value=\"yes\"\/><param name=\"display_static_image\" value=\"yes\"\/><param name=\"display_spinner\" value=\"yes\"\/><param name=\"display_overlay\" value=\"yes\"\/><param name=\"display_count\" value=\"yes\"\/><param name=\"tabs\" value=\"no\"\/><param name=\"filter\" value=\":revert=\"\/><param name=\"refresh\" value=\"yes\"\/><param name=\"filter\" value=\":linktarget=\"\/><\/object><\/div>\n<p>                <script type=\"text\/javascript\">                    var divElement = document.getElementById('viz1670446543980');                    var vizElement = divElement.getElementsByTagName('object')[0];                    if ( divElement.offsetWidth > 800 ) { vizElement.style.width='800px';vizElement.style.height='600px';} else if ( divElement.offsetWidth > 500 ) { vizElement.style.width='800px';vizElement.style.height='600px';} else { vizElement.style.width='100%';vizElement.style.height=(divElement.offsetWidth*1.77)+'px';}                     var scriptElement = document.createElement('script');                    scriptElement.src = 'https:\/\/public.tableau.com\/javascripts\/api\/viz_v1.js';                    vizElement.parentNode.insertBefore(scriptElement, vizElement);                <\/script><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Conclusion<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">These numbers tell real estate investors that it is always crucial to research local market conditions to decide where to invest in rentals. An area largely unaffected by the rental affordability gap may yield an investor lower profits than a housing hotspot, but it will also deliver a steady income from a larger pool of renters who feel confident in their ability to rent long-term. By contrast, investing in real estate in a saturated rental market with sky-high rents will yield higher profits, but it also comes with the increased risk of having vacancies.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If you are a real estate investor located in an area where rent affordability is low, it may be worth your while to research nearby markets that are less saturated and are more affordable to renters. Often these are smaller cities away from major metropolitan areas. Even a small shift away from the ultra-popular cities could deliver you greater stability as an investor.<\/span><\/p>\n\n\n\n<div id=\"hero-block_62ee867235a1c\" class=\"first:mt-0 hero-block py-4    has-background has-slate-300-background-color has-text-color has-slate-800-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-2\/3 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-slate-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find financial freedom through rentals<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px\">If you\u2019re considering using rental properties to build wealth, this book is a must-read. With nearly 400 pages of in-depth advice for building wealth through rental properties,&nbsp;<a class=\"rank-math-link\" href=\"https:\/\/store.biggerpockets.com\/products\/rental-property-investing?utm_source=blog&amp;utm_medium=blog%20banner\" target=\"_blank\"><em>The Book on Rental Property Investing<\/em><\/a>&nbsp;imparts the practical and exciting strategies that investors use to build cash flow and wealth.<\/p>\n\n\n\n<div id=button-custom-event-block_641384b1eb1d8 class='button-custom-event'>\n      <a href=\"https:\/\/store.biggerpockets.com\/products\/rental-property-investing?utm_source=blog&#038;utm_medium=marketing_block\" x-on:click=\"window.analytics.track(&#039;Blog Block | Publishing: Rental Property Investing&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/how-long-it-takes-to-afford-rent-report&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Get Yours Now<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/3 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/03\/rental-property-investing.jpeg\" alt=\"\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>A recent report from&nbsp;Zillow&nbsp;highlights the U.S. affordability crisis creatively. Rather than just focusing on the rapid price growth in rents across the country over the past couple of years, the [&hellip;]<\/p>\n","protected":false},"author":613618,"featured_media":145889,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5528,7119],"tags":[],"class_list":["post-145886","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-news","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/145886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613618"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=145886"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/145886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/145889"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=145886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=145886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=145886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}