By Esther Y. Colon-Bermudez, NLIHC Research Analyst
NLIHC released Out of Reach 2025: The High Cost of Housing on July 17. Published annually, Out of Reach highlights the mismatch between the wages people earn and the price of decent rental housing in every state, metropolitan area, and county in the U.S. This year’s Out of Reach report highlights that amid increasing economic uncertainty and cuts to federal rental assistance, the lowest-income renters continue to struggle to afford housing.
According to the report, in no state, metropolitan area, or county can a worker earning the federal or prevailing state or local minimum wage afford a modest two-bedroom rental home at HUD’s Fair Market Rent (FMR) by working a standard 40-hour work week. Even after accounting for state and county minimum wages that are higher than the federal minimum wage, the average minimum-wage worker must work nearly 116 hours per week, nearly three full-time jobs, to afford a two-bedroom rental home at FMR, or 97 hours per week/2.4 full-time jobs, to afford a one-bedroom rental home at FMR.
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 FMR without spending more than 30% of their income on housing costs—the accepted standard of affordability. Nationally, a full-time worker must earn $33.63 per hour to afford a modest two-bedroom rental home and $28.17 to afford a modest one-bedroom rental home at Fair Market Rent.
Even when we look beyond minimum wage and consider the broader workforce, affordable housing remains out of reach for many. More than half of all wage earners cannot afford a modest one-bedroom rental apartment, and more than 60% cannot afford a modest two-bedroom rental home while working full time. The median hourly wage for 18 of the 25 most common occupations in the country is lower than the two-bedroom housing wage. Workers in these 18 occupations make up 50% of the total U.S. workforce and include occupations like service industry workers, home health aides, and nursing assistants.
The report also highlights the huge pay disparities between Black and Latino households and white households, which poses a barrier to affording housing. The median wage for white workers is nearly enough to afford a one-bedroom apartment at Fair Market Rent. In contrast, the median wage for Black workers is 22% less than that of white workers, and the median wage for Latino workers is 26% less than that of white workers. The inequities are even greater for women of color. Black women earning the median wage for their race and gender earn $1.35 less than Black men, and Latina women earn $2.28 less than Latino men. While a white man earning the median wage can nearly afford a one-bedroom apartment at Fair Market Rent, Black and Latina women fall short of the one-bedroom housing wage by $6.92 and $8.22 per hour, respectively.
Amid widespread concerns about a potential recession and economic uncertainty on the rise, this year’s Out of Reach report includes a section on how renters, particularly low-income renters, are impacted by economic downturns. It examines how previous economic downturns, including the Great Recession and the COVID-19 recession, have deepened cost burdens for low-income renters by looking at cost burden data for extremely low-income (ELI) renters since 2007. This rise in cost burden leaves ELI renters increasingly vulnerable to housing and financial instability.
This year’s Out of Reach report shows clearly that what is out of reach is not just housing, but security and dignity for the nation’s lowest-income renters. In an uncertain economic climate, renters with the fewest resources too often struggle to pay rent, live in unsafe or substandard housing, and are forced to make impossible choices between housing and other basic needs. People can work hard and still fall behind, knowing that one unexpected expense or missed paycheck could leave them homeless. Federal housing assistance would be a lifeline for all of these renters, yet it remains deeply underfunded and increasingly under threat. The American public must reject the harmful budget cuts proposed by the president and demand that Congress protect HUD and the programs it administers. Long-term investments in deeply targeted federal housing programs are needed to ensure the lowest-income renters have stable, safe, accessible, and affordable homes.
The Out of Reach 2025 interactive website includes data for each state, county, and metropolitan area, and an easy-to-use search function for identifying data by metropolitan-area ZIP code. Visit the website at https://nlihc.org/oor.