Realtor.com® November Rental Report: Even with Rent Declines, Minimum Wage Earners Need Extended Hours to Afford Rents

Rhea-AI Summary

Realtor.com's November Rental Report shows median rents declined -1.1% year-over-year to $1,703, marking the 16th consecutive month of decreases. Despite this decline, affordability remains challenging for minimum wage workers in most major U.S. metros. In 44 of the top 50 metros, workers need extended hours to afford typical rentals.

In cities like Nashville, Austin, and Dallas, two minimum wage earners would each need to work 77-82 hours weekly to afford median rent, despite these areas seeing the largest rent declines. Only Denver and Phoenix allow two minimum wage earners to afford median rent working 40 hours or less weekly.

Looking ahead to 2025, 23 of the top 50 markets will see minimum wage increases, potentially reducing required working hours. Rents declined across all unit sizes, with studios showing the largest decrease at -1.6%, followed by one-bedrooms at -1.2% and two-bedrooms at -1.1%.

Positive

• Median rents decreased -1.1% year-over-year to $1,703
• 23 of top 50 markets will see minimum wage increases in 2025
• Rent declines observed across all unit sizes (studios -1.6%, one-bedrooms -1.2%, two-bedrooms -1.1%)
• Denver and Phoenix show improved affordability with 40 hours or less work week needed at minimum wage

Negative

• 44 of top 50 metros require extended working hours for minimum wage earners to afford rent
• Minimum wage workers in Nashville need 82 hours/week to afford median rent
• Despite 16 months of declines, rents remain 18.1% higher than pre-pandemic levels
• San Francisco and San Diego still require 62-65 weekly work hours despite higher minimum wages

Insights

Financial Analyst

The rental market data reveals significant shifts in affordability dynamics across major U.S. metros. The -1.1% year-over-year decline in median rents to $1,703 marks the 16th consecutive month of decreases, signaling a gradual market correction. However, the persistence of affordability challenges, particularly in markets tied to the federal minimum wage of $7.25, suggests structural issues beyond cyclical price movements.

Key markets like Austin, Nashville and Dallas, despite experiencing the largest rent declines, still require unsustainable 77-82 weekly work hours from minimum wage earners. This disconnect between wages and housing costs indicates a fundamental market imbalance. The projected 0.1% rent decline in 2025, coupled with minimum wage increases in 23 of the top 50 markets, points to modest relief but falls short of addressing core affordability issues.

Market Research Analyst

The rental market is showing regional divergence in affordability metrics. Western markets like Denver and Phoenix demonstrate more sustainable work-hour requirements (38-40 hours) due to higher minimum wages, while southeastern markets struggle with federal minimum wage constraints. The data indicates a 18.1% increase in rents since 2019, roughly tracking overall consumer price inflation of 22.7%, but significantly trailing the 49.7% surge in for-sale home prices per square foot.

Studio units show the steepest declines at -1.6% year-over-year, suggesting shifting demand patterns. The -3.2% decline from peak prices represents a modest correction rather than a major market adjustment, indicating persistent structural demand despite affordability challenges.

To afford the median rent, two minimum wage earners would have to each work 82 hours per week in Nashville, Tenn., 79 hours in Austin, Texas and 77 hours in Dallas, three metros that saw the largest decline in rent prices

SANTA CLARA, Calif., Dec. 16, 2024 /PRNewswire/ -- Rents declined in November, falling by -1.1% year over year to a median of $1,703, according to the Realtor.com^® November Rental Report released today. Despite the dip in rents, affordability remains a concern, with minimum wage earners requiring extended working hours to afford a typical rental unit in 44 of the top 50 metros in the United States.

"Lower rents, combined with stable or increased minimum wages, have offered a break to renters in some metro areas this year, though many minimum wage earners still struggle to find affordable rents," said Danielle Hale, chief economist at Realtor.com^®. "With minimum wages set to increase in more than half of the top 50 markets next year, and a projected 0.1% annual decline in median asking rents in 2025, we expect some further relief in the coming year; however, more new construction is still one of the biggest levers we have to help with affordability."

To better understand the hurdles faced by hourly workers in today's rental market, this month, Realtor.com^® analyzed how many hours per week a renter would need to work at local minimum wage rates to afford a typical 0-2 bedroom home. Among the top 10 markets with the largest year-over-year rent declines in November, fewer working hours were required to afford the median rent compared to the same time last year. Yet only in Denver and Phoenix could two minimum wage earners each work 40 hours or less per week and affordably split the median rent for a 0-2 bedroom unit.

Market	Median  Asking Rent, Nov. 2024	Y/Y Change	Annual HH Income Needed  to Afford a 0-2 Bedroom, Nov 2024	Minimum  Wage 2024	Work Hours  per Renter per  Week at Minimum Wage, Nov. 2024	Diff. in Hours  (Nov. 2024 vs.  2023)
Denver-Aurora-Lakewood, CO	$1,808	-6.7 %	$72,320	$18.29	38	-5
Memphis, TN-MS-AR	$1,186	-6.2 %	$47,440	$7.25	63	-4
Nashville-Davidson--Murfreesboro-- Franklin, TN	$1,542	-5.6 %	$61,680	$7.25	82	-5
Austin-Round Rock-Georgetown, TX	$1,486	-4.7 %	$59,440	$7.25	79	-4
San Francisco-Oakland-Berkeley, CA	$2,711	-4.5 %	$108,440	$16.00	65	-5
Dallas-Fort Worth-Arlington, TX	$1,453	-4.4 %	$58,120	$7.25	77	-4
San Diego-Chula Vista-Carlsbad, CA	$2,726	-4.3 %	$109,040	$16.85	62	-5
Phoenix-Mesa-Chandler, AZ	$1,503	-4.1 %	$60,120	$14.35	40	-4
Birmingham-Hoover, AL	$1,236	-3.6 %	$49,440	$7.25	66	-2
San Antonio-New Braunfels, TX	$1,242	-3.5 %	$49,680	$7.25	66	-2

Minimum wage earners need to work extended hours to afford rents
To keep their half of the rent at an affordable 30% of their budgets, two minimum wage earners would have to each work 82 hours per week in Nashville, Tenn., 79 hours in Austin,Texas and 77 hours in Dallas, despite large year-over-year rent declines. The affordability crunch is worst in markets that are subject to the federal minimum wage of $7.25 per hour. But in San Francisco, where the minimum wage is $16, and San Diego, where it's $16.85, workers would still need to work 65 and 62 hours per week respectively to afford the median rent. By contrast, in Denver and Phoenix, two minimum wage earners would each need to work 38 and 40 hours per week respectively to afford the median rent.

Higher minimum wages and falling rents point to continued relief in 2025
Minimum wages will rise in 23 of the top 50 markets on Jan. 1, 2025, while additional markets will see increases later in 2025. If rents hold steady, eight of those markets are expected to see at least a two-hour reduction in weekly working hours at minimum wage needed to afford rent. In both St. Louis and Kansas City, Mo., where the minimum wage is due to rise to $13.75 per hour from $12.30, two workers earning that wage will each need to work four hours less per week to afford the median rent. Minimum wage earners will need to work two hours less in six markets: Sacramento, Calif., Virginia Beach, Va., Riverside, Calif., San Francisco, New York, and San Jose, Calif.

Rents decline across all unit sizes
Rents for 0-2 bedroom units fell on a year-over-year basis for the 16^th straight month in November, dropping by $19 (-1.1%) to $1,703. That's $17 less than last month and $57 lower than its August 2022 peak. It's still $261 (18.1%) higher than the same period in 2019, before the pandemic.

Units of all sizes saw rents fall in November, with smaller units continuing to show larger declines. The median rent for studios fell -1.6% year-over-year, to $1,423. That's down -4.5% from its peak in October 2022 but 12% higher than five years ago. Rent for one-bedroom units dipped -1.2% to $1,585, representing a -4.4% decline from its August 2022 peak but still 16.4% higher than five years ago. And the median rent for two-bedroom units declined by -1.1% to $1,886, a drop of -3.8% from its August 2022 peak. That's 20.2% higher than five years ago.

Despite sixteen months of declines, the U.S. median rent was just $57 (-3.2%) less than the peak seen in August 2022. Notably, it was still $261 (18.1%) higher than the same time in 2019 (pre-pandemic), but this increase is roughly on par with what has occurred in overall consumer prices (up 22.7% in the five years ending November 2024) and pales in comparison to the 49.7% increase in median price-per-square-foot of for-sale home listings in the five years ending November 2024.

National Rental Data – November 2024

Unit Size	Median Rent	Rent YoY	Rent Change – 5 years
Overall	$1,703	-1.1 %	18.1 %
Studio	$1,423	-1.6 %	12.0 %
1-bed	$1,585	-1.2 %	16.4 %
2-bed	$1,886	-1.1 %	20.2 %

50 Largest Metropolitan Areas – November 2024

Metro	Median  Asking Rent	YOY Change	Minimum Wage 2024	2024 Work Hours per Renter  per Week at Minimum Wage
Atlanta-Sandy Springs- Alpharetta, GA	$1,576	-3.1 %	$7.25	84
Austin-Round Rock- Georgetown, TX	$1,486	-4.7 %	$7.25	79
Baltimore-Columbia- Towson, MD	$1,812	-0.2 %	$15.00	46
Birmingham-Hoover, AL	$1,236	-3.6 %	$7.25	66
Boston-Cambridge-Newton, MA-NH	$2,942	-1.0 %	$15.00	75
Buffalo-Cheektowaga, NY	NA	NA	NA	NA
Charlotte-Concord- Gastonia, NC-SC	$1,519	-2.7 %	$7.25	81
Chicago-Naperville-Elgin, IL-IN-WI	$1,793	-2.7 %	$16.20	43
Cincinnati, OH-KY-IN	$1,365	2.6 %	$10.45	50
Cleveland-Elyria, OH	$1,193	-3.0 %	$10.45	44
Columbus, OH	$1,190	0.2 %	$10.45	44
Dallas-Fort Worth-Arlington, TX	$1,453	-4.4 %	$7.25	77
Denver-Aurora-Lakewood, CO	$1,808	-6.7 %	$18.29	38
Detroit-Warren-Dearborn, MI	$1,316	-0.8 %	$10.33	49
Hartford-East Hartford- Middletown, CT	NA	NA	NA	NA
Houston-The Woodlands- Sugar Land, TX	$1,375	-1.4 %	$7.25	73
Indianapolis-Carmel- Anderson, IN	$1,288	-0.8 %	$7.25	68
Jacksonville, FL	$1,523	-1.1 %	$13.00	45
Kansas City, MO-KS	$1,342	1.1 %	$12.30	42
Las Vegas-Henderson- Paradise, NV	$1,479	-0.8 %	$12.00	47
Los Angeles-Long Beach- Anaheim, CA	$2,789	-1.4 %	$17.28	62
Louisville/Jefferson County, KY-IN	$1,245	0.6 %	$7.25	66
Memphis, TN-MS-AR	$1,186	-6.2 %	$7.25	63
Miami-Fort Lauderdale- Pompano Beach, FL	$2,353	-1.1 %	$13.00	70
Milwaukee-Waukesha, WI	$1,613	-0.2 %	$7.25	86
Minneapolis-St. Paul- Bloomington, MN-WI	$1,516	0.1 %	$15.57	37
Nashville-Davidson-- Murfreesboro--Franklin, TN	$1,542	-5.6 %	$7.25	82
New Orleans-Metairie, LA	NA	NA	NA	NA
New York-Newark-Jersey City, NY-NJ-PA	$2,905	2.0 %	$16.00	70
Oklahoma City, OK	$1,023	1.6 %	$7.25	54
Orlando-Kissimmee- Sanford, FL	$1,680	-0.9 %	$13.00	50
Philadelphia-Camden- Wilmington, PA-NJ-DE-MD	$1,761	-1.1 %	$7.25	93
Phoenix-Mesa-Chandler, AZ	$1,503	-4.1 %	$14.35	40
Pittsburgh, PA	$1,440	-0.9 %	$7.25	76
Portland-Vancouver- Hillsboro, OR-WA	$1,687	1.6 %	$15.00	43
Providence-Warwick, RI-MA	NA	NA	NA	NA
Raleigh-Cary, NC	$1,512	-1.4 %	$7.25	80
Richmond, VA	$1,478	-1.3 %	$12.00	47
Riverside-San Bernardino- Ontario, CA	NA	NA	NA	NA
Rochester, NY	$1,319	4.3 %	$15.00	34
Sacramento-Roseville- Folsom, CA	$1,902	1.7 %	$16.00	46
San Antonio-New Braunfels, TX	$1,242	-3.5 %	$7.25	66
San Diego-Chula Vista- Carlsbad, CA	$2,726	-4.3 %	$16.85	62
San Francisco-Oakland- Berkeley, CA	$2,711	-4.5 %	$16.00	65
San Jose-Sunnyvale-Santa Clara, CA	$3,314	2.6 %	$17.55	73
Seattle-Tacoma-Bellevue, WA	$1,971	-2.3 %	$19.97	38
St. Louis, MO-IL	$1,323	1.1 %	$12.30	41
Tampa-St. Petersburg- Clearwater, FL	$1,713	-1.7 %	$13.00	51
Virginia Beach-Norfolk- Newport News, VA-NC	$1,500	-0.6 %	$12.00	48
Washington-Arlington- Alexandria, DC-VA-MD-WV	$2,255	2.0 %	$17.50	50

Methodology
Rental data as of November 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com^®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.

To determine the minimum wage at the metro level, we use the minimum wage of the principal city as a representative figure for the metro area. If the principal city does not have a local minimum wage policy, the state-level minimum wage is applied. In cases where the state does not have a minimum wage regulation, the Federal minimum wage of $7.25 per hour is used. Minimum wage data is sourced from ADP.

About Realtor.com^®
Realtor.com^® is an open real estate marketplace built for everyone. Realtor.com^® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com^® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com^® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com^®.

Media Contact: Mallory Micetich, press@realtor.com 

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SOURCE Realtor.com

FAQ

How much did median rents decrease in November 2024 according to Realtor.com?

Median rents decreased by 1.1% year-over-year to $1,703 in November 2024.

Which cities require the most working hours for minimum wage earners to afford rent in 2024?

Nashville requires 82 hours per week, Austin requires 79 hours, and Dallas requires 77 hours per worker at minimum wage to afford median rent.

How many major markets will see minimum wage increases in 2025?

23 of the top 50 markets will see minimum wage increases starting January 1, 2025.

How much have rents increased compared to pre-pandemic levels?

Rents are 18.1% ($261) higher than in 2019, pre-pandemic levels.

Which cities showed the largest rent declines in November 2024?

Denver showed the largest decline at -6.7%, followed by Memphis at -6.2% and Nashville at -5.6%.