For millions of Americans, homeownership continues to feel like a distant goal not because of a lack of desire, but because the numbers simply don’t add up. While mortgage rates and home prices often dominate housing headlines, a quieter but equally powerful force is shaping the housing crisis in 2025: rent affordability.
According to the latest Out of Reach 2025 report from the National Low Income Housing Coalition (NLIHC), rising rents and slow wage growth are creating a financial bottleneck that prevents renters from ever reaching the starting line of homeownership. The data paints a sobering picture of how deeply entrenched the affordability gap has become.
Rent May Be Stabilizing But It’s Still Too High
While rent growth has slowed compared to the rapid spikes seen during the pandemic years, rents remain historically elevated. According to Zumper’s National Rent Index, the median advertised rent nationwide is approximately:
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$1,520 for a one-bedroom apartment
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$1,910 for a two-bedroom apartment
At face value, these numbers may appear manageable. But affordability isn’t about the price alone it’s about how rent compares to income. For many renters, wages have failed to keep pace with the cost of housing, turning even “stable” rent levels into a persistent financial strain.
What Renters Actually Need to Earn
The Out of Reach 2025 report highlights a critical benchmark known as the “Housing Wage” the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30% of their income on housing.
In 2025:
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A renter needs to earn $28.17 per hour to afford a modest one-bedroom rental.
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A renter needs $33.63 per hour to afford a modest two-bedroom rental.
These figures are more than four times the federal minimum wage, which remains at $7.25 per hour. Even in states with higher minimum wages, many full-time workers still fall well short of what’s required to comfortably afford housing.
Working Full-Time Isn’t Enough Anymore
One of the most alarming findings in the report is how many jobs it would take for a minimum-wage worker to afford a standard two-bedroom apartment.
In several states:
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New Hampshire: Nearly 4.8 full-time jobs are required.
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Georgia and Texas: More than 4 full-time jobs are needed.
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Florida: Roughly 3.5 full-time jobs are required just to afford rent.
This reality underscores a growing disconnect between wages and housing costs. Housing is no longer something many workers can afford with a single job or even two.
Affordability Depends on Where You Fall on the Income Ladder
The report also breaks down affordability by income percentile:
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Workers at the 70th income percentile can generally afford a two-bedroom rental.
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Workers at the 60th percentile can afford a one-bedroom but not a two-bedroom.
That leaves a significant portion of the workforce priced out of housing that meets their household needs. Families, single parents, and multi-generational households are particularly affected, as smaller units often don’t provide sufficient space.
Racial and Gender Disparities Worsen the Crisis
Housing affordability is not experienced equally across demographics. Wage disparities by race and gender significantly affect who can afford rent and who can realistically save for homeownership.
Median hourly wages show:
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White men ($30.53/hour) are the only demographic group earning enough, on average, to afford a modest one-bedroom rental.
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White women ($25.31/hour) fall short.
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Black men ($22.60/hour) and Latino men ($22.23/hour) face even larger gaps.
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Black women ($21.25/hour) and Latina women ($19.95/hour) experience the steepest affordability challenges.
These disparities compound over time, limiting wealth-building opportunities and reinforcing long-term inequality in housing access.
Why High Rent Blocks the Path to Homeownership
For renters hoping to buy a home, high rent creates a financial trap. When a large portion of income goes toward housing, there’s little left for:
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Saving for a down payment
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Building emergency funds
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Improving credit scores
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Covering rising costs of food, transportation, and healthcare
At the same time, home prices remain elevated, and mortgage rates continue to pressure affordability. The result is a generation of renters who are financially responsible, fully employed yet unable to make the leap into homeownership.
What Needs to Change
The findings from the Out of Reach 2025 report make one thing clear: the housing crisis cannot be solved by focusing solely on homeownership incentives. Without addressing rent affordability and wage growth, many renters will never reach a position where buying a home is possible.
Experts point to the need for:
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Expanded investment in affordable rental housing
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Stronger wage growth and labor protections
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Policies that reduce housing cost burdens for working families
Until these systemic issues are addressed, the gap between renting and owning will continue to widen leaving homeownership out of reach for millions.
Source: 3 charts that show why renters struggle to become homeowners – HousingWire
https://www.housingwire.com/articles/rent-prices-homeownership-nlihc-out-of-reach-report-2025/