SEATTLE, WA — A recent analysis by Zillow and its New York City brand StreetEasy reveals that nearly half of U.S. renter households are struggling with rent expenses, with Gen Z renters bearing the greatest burden. The study, based on the U.S. Census Bureau’s 2022 American Community Survey, shows that three in five Gen Z renters, aged 18-25, spend over 30% of their income on housing. This trend is particularly pronounced in major metros like San Diego, Los Angeles, and Sacramento, where nearly 75% of young renters are financially strained by rent.
This situation mirrors the challenges faced by Millennials a decade ago. In 2012, 60.2% of Millennials were spending a significant portion of their income on rent, peaking at 62% in 2011. Although the percentage decreased to 55% by 2019, recent years have seen a reversal. Rising rental demand post-pandemic, combined with long-term housing shortages, has driven rents higher nationwide.
StreetEasy Senior Economist Kenny Lee noted, “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. 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 17 of the 30 largest U.S. metros saw a slight improvement in rent burden for Gen Z compared to Millennials in 2012, the gains are modest. In every major metro, at least half of Gen Z renters still face rent burden. Austin experienced the largest decrease in rent-burdened young adults over the past decade, while Houston saw the most significant increase.
Zillow Rental Trends Expert Emily McDonald pointed out the trade-offs young renters face: “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. 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.”
The findings underscore the ongoing challenges of housing affordability for younger generations, highlighting the need for solutions to ease the financial strain on renters across the country.
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