It all Adds Up to Unaffordable
The most recent blog from the Harvard Joint Center for Housing Studies indicates that the cost of new rentals have gone up by an average of $180/month, while wages have risen an average of $60/month. Looking more closely at those numbers, if the average wage earner ($32,700) was paying for the average new rental ($1,260/mo), that renter would be paying almost 50% of his income in rent alone. Housing costs are considered affordable if they total 30% or less of salary.
These averages don’t really tell the story. Some places the increase in costs is much higher, even though the minimum wage is still pretty much the same all over America. And it’s not just those at the low end of the pay scale who are feeling the pinch of high housing costs.
The truth is, stagnant wages combined with rising housing costs is taking a big bite out of most working folks take home, leaving less for other necessities including health care, food, and education. Are we pricing Americans out of America?