The rental market has seen a significant cooldown in rent prices over the last two years, but many renter households, specifically those with lower incomes, struggle to afford rent at current wage levels. The National Low Income Housing Coalition (NLIHC) released its Out of Reach report ranking the states with the highest housing wages, with Virginia sitting at 18th on the list. Let’s break down what those numbers look like.

Per the report, the Fair Market Rent (FMR) for a two bedroom in Virginia is $1,573, so a full-time worker would need to make $30.25/hr. or $62,925 annually to afford it. The average renter wage in the state is $23.17, which is not enough to afford any FMR apartment in the state. This becomes even more challenging for those households who are making minimum wage and have incomes below the area median income (AMI). For someone making the state minimum wage of $12/hr., they are only able to afford a rent price of $624. They would need to work 87 hours per week and 2.2 full-time jobs to afford a one-bedroom unit, and 101 hours a week with 2.5 jobs to afford a two-bedroom rental. Those at 50% of the AMI can afford a unit at $1,440 per month, enough for a one-bedroom unit but $133 less than what is needed for a two bedroom.

At the local level, the highest housing wage was in Northern Virginia with the FMR for a two bedroom at $2,045, meaning an individual would have to make $39.33/hr. to afford it. Currently the estimated mean renter wage is $29.95, so a renter would only be able to afford $1,557 per month for a unit, below what is needed. Roanoke had the lowest housing wage across all nine metro areas with renters needing to make $20.92 for a two-bedroom apartment. With a renter wage of $18.26, an individual would be $139 short of what is necessary to afford a two bedroom in this area.

The wages for those who work in Virginia’s most common occupations were lower than what was needed to afford a one- and two-bedroom apartment. Fast food workers were the largest occupational group but made $14.14 per hour, $16.11 less than the housing wage for a two-bedroom rental and $11.53 less than needed for a zero bedroom. The occupation with the highest median wage at $66.50 were software developers who could afford zero-to-four-bedroom apartments in the state.

Along with wages, supply is also a big issue for renters with the NLIHC finding the U.S. has a shortage of 7.3 million affordable rental homes for extremely low-income renters. With more multifamily units set to hit the market this year, it is important to keep this segment of the renter population in mind moving forward.

For more information on housing, demographic, and economic trends in Virginia, be sure to check out Virginia REALTORS^® economic insights blogs and our data page.