A person earning North Carolina’s minimum wage of $7.25 per hour would need to work 139 hours per week to afford a two-bedroom rental at the current fair market rate of $1,311, according to a new study.
This equates to working three and a half full-time jobs in 2024.
This stark reality affects some of North Carolina’s 1.4 million renters, as reported by Out Of Reach, a publication from the National Low Income Housing Coalition.
To afford rent and utilities without spending more than 30% of their income on housing, a household must earn $4,370 monthly or $52,437 annually in North Carolina, the report said. For a 40-hour work week, that means earning $25.21 per hour.
This wage is more than triple the minimum wage and significantly higher than the state’s average hourly wage of $20.61.
The gap is even larger for nursing assistants ($17.11), restaurant cooks ($16.76), and retail salespersons ($14.73), making North Carolina the 28th most expensive state for renters.
“This metric underscores the disconnect between wages and the cost of housing,” said Kevin Campbell, executive director of Raleigh Area Land Trust. The trust supports low- to moderate-income adults and families in Raleigh and Wake County.
The gap has widened post-COVID. “Housing is becoming increasingly unattainable for many working essential jobs within our community,” Campbell added.
U.S. Rep. Wiley Nickel (D-Cary) stated that North Carolina is “in the middle of a housing crisis.” According to the report, there are only 66 affordable rental units available per 100 households at or below the 50% area median income (AMI) threshold in the state.
Statewide, there are 185,186 fewer affordable homes than needed to house working families, said Nickel. He introduced the Keep Housing Affordable Act to provide incentives for developers to maintain affordable housing for extended periods.
Nationally, no state offers a full-time worker earning the federal or local minimum wage the ability to afford a modest two-bedroom rental home at fair market rent, according to the report.
In 2024, a full-time worker needs to earn $32.11 per hour on average to afford a modest two-bedroom rental in the U.S., and $26.74 for a one-bedroom rental.
North Carolina’s Most Expensive Areas
Some areas in North Carolina are worse than others. Asheville has the highest fair market rate for a two-bedroom rental at $1,680, requiring a minimum wage worker to work 4.5 full-time jobs to afford it.
Raleigh follows with a fair market rate of $1,646 for a two-bedroom rental, requiring 4.4 full-time jobs for affordability.
Durham-Chapel Hill comes in third, with a fair market rate of $1,631 for a two-bedroom rental, necessitating 4.3 full-time jobs.
The report’s “housing wage” estimates the hourly wage needed to afford a modest rental home at HUD’s fair market rent (FMR) without spending more than 30% of income on housing costs. Here are the hourly housing wages:
- Zero-bedroom (studio): $20.87
- One-bedroom: $21.75
- Two-bedroom: $25.21
- Three-bedroom: $32.33
- Four-bedroom: $40.05
This translates to the following annual incomes:
- Zero-bedroom: $43,401
- One-bedroom: $45,235
- Two-bedroom: $52,437
- Three-bedroom: $67,237
- Four-bedroom: $83,299