Rent By The Hour – Pay Needed for Shelter

HOUSTON – (By Dale King, Realty News Report) — An American wage earner making an average salary needs to work a total of 62.3 hours before earning enough money to pay the typical monthly U.S. rent of $2,040, says a just-released analysis by real estate firm Zillow.

That’s three hours more job-related toil than a tenant had to put in to make the rent payment a year ago — and six hours more than in October of 2019, just before the pandemic.

Luckily, the four major metros in Texas lie somewhere between the U.S. average and the low end of the lease-payment spectrum. And nowhere near the top of the charts where a rent check forces earners to toil 80 to 90 hours – such as New York (87.0 hours), Riverside, Calif. (90.5 hours) or San Diego (85.5 hours).

Among surveyed Lone Star metros, Houston offers the best deal involving the least amount of time spent working, says Zillow. Houstonians can pay their standard rent of $1,613 by working 52.4 hours.

The analysis said typical rent payments for units in Houston risen 24.8 percent over the past five years while wages grew just 12.9 percent.

Next highest is San Antonio where laborers can put in 55.1 hours to cover their rent check which averages $1,518 a month. Here, rents have gone up 32.9 percent in the past half-decade while wages increased 21.2 percent.

Workers in Dallas/Fort Worth must put in 55.6 hours to pay their monthly rent check estimated by Zillow at $1,855. Average D/FW leases have risen 40.1 percent in the past five years while wages rose 24.8 percent.

Topping the Texas list is Austin where jobholders must toil 58.0 hours to meet their typical monthly lease of $1,912. The state capital, where prices of homes and rental residences have run high for the past couple of years, according to various reports, saw average apartment lease costs rise 42.6 percent during the last five years while wages increased only 17.5 percent.

The Zillow report points out that its overall figures “illustrate the growing affordability hurdles renters face, even amid what has been considered a strong labor market. The average hourly wage has grown just 23 percent over the past five years, but rents are up 36.9 percent during the same period.”

The survey says workers in Miami must labor the most hours of all employees in the nation – 95.9 hours – just to make the rental nut. That is 24 hours more than Miami renters would have needed to work to pay rent five years ago, the biggest gap among the 50 largest U.S. metro areas.

Zillow estimates the monthly rental amount in Miami is $2,837, 59.5 percent more than five years ago. During that same period, the average wage in that region increased just 18.9 percent.

Folks who live and work at the other end of the spectrum don’t have to deal with the same level of angst to pull together sufficient dollars for the monthly rent check. Workers in St. Louis, Mo., get the job done in just 37.1 hours; Milwaukee, Wisc., 37.4 hours; Buffalo, N.Y., 41.4 hours and Cleveland, Ohio, 41.6 hours.

“The rental market has cooled this year, but so far that has meant prices growing more slowly, not any real relief for renters,” said Jeff Tucker, senior economist at Zillow. “Rents were growing at a record pace for much of 2021, squeezing budgets for renters moving or renewing leases. Now, it appears more people are opting to double up with roommates or family, which means more vacancies and pressure on landlords to price their units competitively, offering some hope of relief on the horizon.”

Tucker did note that “rents fell last month for the first time in two years, possibly the start of more price drops to come, or at least a signal that we are back to the usual seasonal rhythms of the rental market.”

The typical U.S. rent finally ended a two-year streak of nonstop growth in October, falling 0.1 percent month over month to $2,040. Annual rent growth peaked at a record 17.1 percent in February and has since slowed to 9.6 percent year-over-year growth.

In addition to Miami, other markets in the Sun Belt — the hottest housing region during the pandemic — have seen similarly large jumps in hours of work needed to pay rent. An average worker in Tampa would need to work an additional 20 hours to pay rent compared to five years ago. Phoenix rents are up 66.7 percent since 2017, the most in the country among large markets, and renters need to work 17 hours more to pay rent.

Even after steep rent hikes, hours of work needed to afford rent remain below the national average of 63 hours in several Sun Belt markets. These include Atlanta (61 hours), Memphis (54.7 hours), Raleigh, N.C. (55.5 hours) and Nashville (60 hours), among others. “While longtime residents will see a much different picture than they may have been used to, these markets still offer relative affordability and are likely to continue to attract residents from more expensive areas of the country.”

Rents have gotten easier to pay over the past five years in only three large metros, and they are among the most expensive in the country: San Jose, Boston and San Francisco. Rents have grown more slowly than average in these markets, helping wages catch up just a bit.

Even after the slight drop since 2017, the average person would need to work more hours to pay rent than the national average in each of these markets.

The Zillow analysis used data from the U.S. Bureau of Labor Statistics to determine hours of work needed and rent data from the Zillow Observed Rent Index. The U.S. estimate uses October 2022 rent and wage data. Estimates for each metro area use September 2022 rent and wage data. October 2022 wage data was not yet available at the metro level.

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