Housing Market Expectations for 2025
Corey Burr from Sotheby’s International Realty recently shared insights regarding the housing market outlook for the coming year with LiveNOW’s Josh Breslow.
The Struggle for Affordability
Recent analysis highlights a significant challenge: the average minimum wage worker in the United States must work more than double the full-time hours to comfortably afford the median rent for an apartment.
As reported by Redfin, experts suggest that individuals should ideally allocate no more than 30% of their income towards housing. However, this guideline has become increasingly difficult to maintain as rent prices surge.
Many minimum wage earners find themselves living in apartments with rents below the median levels yet still struggle to keep their housing costs within this recommended threshold.
Current Apartment Prices Nationwide
The median rent for an apartment in the U.S. stands at $1,599, according to Redfin’s findings. Although the federal minimum wage has stagnated at $7.25 since 2009, many states have adopted higher rates, resulting in an average minimum wage of $11.59 per hour in 2025. Despite this increase, the numbers remain grim; a minimum wage worker would need to clock in an astounding 106 hours weekly to afford such an apartment.
Notably, the majority of minimum wage workers are young individuals, frequently employed in the service industry, with women comprising a larger share of this demographic, according to the U.S. Bureau of Labor Statistics.
Insights from Economists
As articulated by Daryl Fairweather, Redfin’s Chief Economist, “It’s obviously not realistic for most people to clock into their job for over 100 hours a week, but this thought experiment shines light on the massive rental affordability gap between the average American and our country’s lowest earners. It’s virtually impossible for a minimum-wage worker to afford the typical apartment on their own, which is why many have to find ways to reduce their housing expenses.”
Is Renting or Buying More Affordable in 2025?
Deciding whether to rent or buy a home in 2025 presents its own set of financial challenges. The 2025 Rental Affordability Report, published by real estate analytics firm ATTOM, reveals that both renting and purchasing a home can consume between 25% to 60% of an average worker’s wage.
Analyzing over 341 markets, ATTOM’s report indicates that in nearly 60% of these areas, owning a single-family home is more cost-effective than renting a three-bedroom house.
Most Affordable Rental Markets
- Black Hawk County (Waterloo, Iowa)
- Wayne County (Detroit, Michigan)
- Genesee County (Flint, Michigan)
- Jefferson County (Birmingham, Alabama)
- Hinds County (Jackson, Mississippi)
