People in these states have the hardest time paying their rent

0

Housing prices are on the rise across the country, from buying prices for homes to rental prices for apartments. Unfortunately, with inflation also at a level not seen in 13 years and the minimum wage stagnating, housing affordability is increasingly an issue.

The amount you pay for rent where you live depends on several factors, including the state where you live, whether the area is rural or metropolitan, and the size of the residence you require. We looked at the median rent price by state and the median household income in each state to determine which state residents might have the most difficulty paying rent.

6 simple tips to get a 1.75% mortgage rate

Secure access to The Ascent’s free guide on how to get the lowest mortgage rate when buying your new home or refinancing. Rates are still at their lowest for decades, so act today to avoid missing out.

By submitting your email address, you consent to our sending you money advice as well as products and services which we believe may be of interest to you. You can unsubscribe anytime. Please read our privacy statement and terms and conditions.

No surprises here: you’ll pay more for a panoramic view

Based on median rent and median household income data from the US Census Bureau, the three states where you will spend the largest percentage of your income on rent (for a one-bedroom apartment) are Florida, California and Hawaii.

Florida has a median rent of $ 1,175, which doesn’t sound too bad, but its median household income is only $ 55,660, which means about 25.3% of a person’s annual income. housekeeping is spent on the rent bill alone. Meanwhile, California and Hawaii have significantly higher median rent prices – $ 1,503 and $ 1,617 respectively – but their median incomes are also significantly higher at $ 75,235 for California and $ 81,275 for Hawaii. This means Californians spend a total of 24% of their income on rent and Hawaiians spend around 23.9%.

Also keep in mind that the median rents in this data are for one-bedroom apartments, meaning that the majority of households (i.e.

Minimum wage workers don’t stand a chance

Median household incomes in these three states are well above the minimum wage. People earning minimum wage in these states unfortunately have no chance of comfortably paying the median rent for a one-bedroom residence.

Californians earning the state’s minimum wage of $ 14 an hour are expected to spend 62% of their income on rent, while Floridians earning the new state average of $ 10 an hour (as of September 30 2021) will spend 67.8% of their income to rent. Hawaiians are on a whole new level of difficulty. Making just $ 10.10 an hour at minimum wage, they are expected to spend 92.4% of their annual income to pay the median rent for a one-bedroom apartment.

It’s a big problem. It is recommended that people spend no more than 30% of their income on housing. It’s so that they have room in the budget to afford things like groceries, gasoline, child care, payments and vehicle maintenance, and many other things. Someone who spends 60%, 70%, or more than 90% of their income just on rent would not have enough money in the budget to account for these other items, let alone build an emergency fund. .

Honorable mention

Although Washington, DC is not a state – at the moment – it deserves an honorable mention here. Data from Profitable shows that the median rent for a one-bedroom apartment in Washington, DC in 2020 was $ 2,324. This is higher than the average in any state. DC also has the highest median household income, at $ 85,203, but that still makes the percentage of income spent on rent in DC a whopping 32.7%. And again, families who need more than a bedroom are considering even higher housing costs. Not to mention the additional costs for things like utilities and, in some cases, parking or a garage.

What to do if you’re having trouble paying your rent

Whether or not you live in one of the states mentioned above, if you are having trouble paying your rent, there are some options you can follow.

Your personal situation will determine which of these options will work best for you. If you’re single and live in a two-bedroom rental, a roommate might be the perfect solution to cut your rent in half. If you are married with children, getting a roommate or moving abroad can be more difficult. You may instead need to focus on making more money from your job, than that means asking for a raise or changing jobs or professions. Side activities are also always a popular choice as the possibilities are almost endless, and many side activities can be extremely lucrative if you have the time to devote yourself to them.

Mortgage rates are expected to stay low for at least the next two years. So, once new homes come onto the market and the competition for housing slows down, we should hopefully see home purchase prices and rental prices come down and give landlords and renters a boost. little much needed relief. But until that happens, renters and landlords will need to buckle down, do their research, and make the most of the options available.


Source link

Leave A Reply

Your email address will not be published.