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The amount of time Americans earning average wages need to work to pay monthly rent has climbed by six hours compared to before the COVID-19 pandemic.
People in the U.S. now must work 62.6 hours to pay rent each month, according to a new report from Zillow.
That’s in response to rent that has grown by about 37 percent in the past five years while wages lagged behind, rising just 23 percent in that time.
“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.
After a brief pause during the onset of the pandemic, rent grew at historically high rates for nearly two straight years before beginning to slow in 2022.
Demand begins to weaken in the rental market, and economists are waiting to see whether it’s a temporary slowdown or a sign of more significant weakening.
“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 said. “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.”
Rent growth peaked in February when it rose 17.1 percent compared to a year before. That represents the high point before the market slowed to 9.6 percent year-over-year growth in October, Zillow reported.
The typical monthly rent is now $2,040. Average hourly wages in the U.S. rose to $32.58 per hour, according to the U.S. Bureau of Labor Statistics.
Zillow created an interactive table to track changes in the number of hours needed to cover typical monthly rent by market.