Poor apartment? Many renters pay more than they can afford.

A new report shows that the typical American renter must work 50 hours to pay the rent.

This is an alarming finding, say financial experts. Fifty hours is just over 30% of a month’s work, based on a 40-hour work week. And common wisdom dictates that American households should spend no more than 30% of their income on rent.

The new analysisfrom the personal finance website Self Financial, finds that the average worker needs to work more than a week at an average hourly wage of $34.59 to cover the average monthly rent of $1,733. It is based on census and federal labor data.

No one should spend more than 30% of their income on housing, according to a basic rule of thumb in personal finance that sets a threshold for “affordable” rent.

“In general, the more you spend on essentials like shelter, the less you have in your budget to spend on other things,” said Kara Nga senior economist at Zillow.

However, the Self Financial report found many states where you would need to work more than 30 percent of the month, on average, to pay rent. The report looks at average rents and hourly wages to calculate how many hours of work would be needed to cover the rent in each state:

In California, where rent averages $2,493 per month, a tenant would need to work 64.5 hours at $38.63 per hour to pay the rent.
In Florida, with an average monthly rent of $2,033, a tenant would work 63.5 hours at $32.01 an hour to make the rent.
And in Texas, where rent averages $1,720 per month, a tenant must log 52.9 hours at $32.54 per hour to pay the rent.

Half of all tenants pay “unaffordable” rents.

More than 22 million American households are spending at least 30 percent of their income on rent and utilities as of 2022, a record high, according to the data. a 2024 report from the Joint Center for Housing Studies at Harvard University.

That means half of tenants are paying more rent than they can afford.

Rent is also rising faster than income. Average rents rose 21 percent between 2001 and 2022, after inflation, Harvard reports. In the same years, renters’ incomes increased by only 2%.

Another report, from Zillow, shows that the typical rental household spends almost exactly 30% of its income, the affordability threshold, on rent in 2024.

Rents rose by 3.3% compared to this time last year as of September, according to Zillow. Their report shows that rents are increasing on an annual basis in 49 of the 50 largest metro areas.

Rents have risen by a third since the start of the pandemic, Zillow says, meaning rents are rising faster than inflation.

“This is the biggest component of your household budget and that’s where we’ve seen the most pronounced and consistent increases over the last four years or so,” said Greg McBridechief financial analyst, personal finance at Bankrate.

If you pay less than $1,000 in rent, stay put

Meanwhile, the cheap rents are slipping away. Only about a third of tenants now pay less than $1,000 in monthly rent, the lowest figure on record, according to a the new Redfin report.

In 2012, Redfin says, half of renters paid less than $1,000 a month.

If you’re still paying less than $1,000 in rent, you’d be wise to stay put: Only 7.5% of apartment listings today have asking rents under $1,000.

The good news, according to rental platform Rent., is that rents are basically flat nowat the national level. Some cities, especially in the Sun Belt, have so much new construction that they are now oversupplied. This means that landlords offer concessions to potential tenants.

“We’re taking a break in the rental market right now, so that’s actually good news,” he said Chen Zhaohead of economic research at Redfin. “I think we’re slowly going to eliminate the affordability problem.”

Some renters are moving from higher-priced cities in the West and Northeast to less expensive addresses in the South and Midwest, Bank of America Institute rEPORTS.

Other tenants are “downgrading,” finding cheaper apartments in the same market, the report said.

Despite rising rents, it’s still cheaper to rent than to buy in all 50 of the largest metro areas, Bank statements. The typical mortgage payment is now $2,703, the report says, compared with a typical monthly rent of $1,979.

“As a renter, you’re still paying less,” Ng said.

If the rent is unaffordable, find ways to cut back

If you pay more than 30% of your income in rent, say financial experts, you may be living pay check to pay check.

“It means making very hard decisions in other parts of your budget,” he said Kimberly Palmerpersonal finance expert at NerdWallet.

The best way to cut costs, Palmer said, is to focus on high-cost expenses beyond the essentials: “things like your food eaten out, any restaurant expenses. The fun stuff.”

If you rent, you miss out on the financial benefits of home ownership, including tax breaks and building equity.

But that doesn’t mean renters can’t save.

“The key is to find room in your budget to save, even if it’s a small amount each month,” Palmer said. “Because then you’re building that down payment you’d need to buy a house.”

Consider the “pay yourself first” strategy, Bankrate’s McBride said. Take automatic deductions from your paycheck for retirement savings and emergency savings, with some of the funds potentially available to help you with a future down payment. If you have a surplus at the end of the month, “that gives you a second bite at your savings,” he said.

You might even consider putting off saving for retirement and college, Palmer said, so you can aggressively save for a home.

“It’s temporary,” she said. Once you buy the house, you can catch up on saving for everything else.