SALT
LAKE CITY, June 26, 2024 /PRNewswire/ -- In a
new study by BadCredit.org, researchers put a price tag on the
formidable obstacles minimum wage workers face to afford a home
across the U.S. The analysis compares Zillow home prices over the
past year to minimum wages in every state.
"The findings are a sobering reminder of the financial hurdles
that low-income earners face in achieving the American Dream of
homeownership," said Jon McDonald,
Senior Editor at BadCredit.org. "While we're seeing increases in
minimum wage, such as the recent rise for California's fast food workers, these steps
are often insufficient to bridge the gap in high-cost housing
markets."
Key Findings:
- If they started saving 10% of their paycheck at age 18, workers
could afford an 8% down payment in roughly 23.1 years at age
41. That's 4,809 hours of work.
- Salaried workers making the U.S. median income achieve the same
milestone in just 5.1 years.
Where is it Least Feasible for Minimum Wage Workers to Own a
Home?
- Utah: It takes 34.1
years to afford a down payment, the longest time of any state.
On their median income, the same goal is met in 6.5
years.
- New Hampshire: Minimum
wage workers can afford a down payment in 29.9 years.
- In 10 other states, including North Carolina and Texas, it would take minimum wage workers more
than two decades. Hawaii,
Montana, and California are the only three to make this
list with minimum wages above the federal wage ($7.25) due to their comparatively high housing
costs.
The April increase in CA brings renewed attention to wage
sufficiency in high-cost states. While this provides relief, the
study indicates that even at an elevated wage, affording a home
remains a distant goal for many.
Where is it Most Feasible for Minimum Wage Workers to Own a
Home?
The American dream is more realistic in these states:
- Illinois: Minimum-wage
workers could save in 8.6 years.
- In West Virginia,
Arkansas, and
Missouri workers can save
for a down payment in less than 10 years.
Methodology
Researchers scraped median single-family residence and condo
home values on Zillow over 12 months, comparing them to the minimum
wage in every state, according to the Department of Labor. They
assumed an 8% down payment (typical for first-time homebuyers per
the National Association of Realtors®) and a savings rate of 10% of
total income while working 40 hours per week, 52 weeks per year, to
calculate the years someone would need to save the down payment
amount.
About BadCredit.org
BadCredit.org is a leading financial resource dedicated to
helping individuals and families make informed financial decisions.
Through comprehensive research and expert advice, BadCredit.org
provides valuable insights on personal finance, credit, and
consumer advocacy.
For more information about the study and its findings, visit
BadCredit.org.
Media Contact
Ashley
Fricker
703-596-1353 ext. 141
379587@email4pr.com
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SOURCE BadCredit.org