Nearly half of all renter households are burdened by rent costs, with Gen Z renters carrying the greatest burden, according to a data analysis report by Zillow (NASDAQ: Z, ZG) and its StreetEasy brand.
The new data analysis, which is based on the US Census Bureau’s 2022 American Community Survey, found three in five Gen Z renters (ages 18-25) spend more than 30% of income on housing expenses – and that share is higher in 21 of the country’s 30 largest metro areas. But Zillow noted that while 58.6% of today’s Gen Zers are rent burdened, that financial pain among young adults peaked at 62% in 2011 before declining to 55% by 2019. The trend reversed in recent years due to a growth in pandemic-era rental demand that was not supported by the proper supply of this type of housing.
“The experience of struggling to pay rent on an entry level salary is familiar to so many of us that it’s almost become normalized in our society,” said StreetEasy Senior Economist Kenny Lee. “But this is something that should not be normal. Rent burden makes it a struggle for these young adults to afford the other expenses in their lives – things like student loans and medical payments. It’s deeply damaging to their ability to save for future life goals, like one day owning a home.”
“While these large metropolitan areas may be known to have more expensive housing, we have to recognize that they’re also where the jobs are,” added Zillow Rental Trends Expert Emily McDonald. “For many Gen Z renters, choosing to live in a less expensive city may come at the expense of their career, which is why it’s so necessary we find ways to make living in these areas more affordable for young adults.”
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