While nearly half of all renter households are cost burdened, Gen Z renters are impacted the most. According to a new analysis of the U.S. Census Bureau’s 2022 American Community Survey by Zillow and StreetEasy, its New York brand, 58.6% of Gen Z renters between the ages of 18 and 25 spend more than 30% of their income on housing costs.
They found that in 21 of the nation’s 30 largest metros, the share is higher. For example, nearly three-quarters of Gen Z renters are cost-burdened in the California markets of Los Angeles, Sacramento, and San Diego.
“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.”
However, today’s Gen Z renter experience is slightly improved from the millennial generation’s experience when they were a similar age a decade ago. In 2012, 60.2% of millennials spent more than 30% of their income on housing costs. According to the analysis, the rent burden among young adults peaked at 62% in 2011 but declined to 55% by 2019. The trend reversed following the pandemic when surging rental demand led to rent increases across the nation.
The analysis also found that millennials in 2012 were more likely to experience cost burdens in 17 of the 30 largest metros compared with Gen Z renters in 2022—however, the improvement has been modest. Austin, Texas, had the largest decline, -9.5%, in the share of rent-burdened young adults in the past decade, while Houston had the largest increase at 11.9%.
“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,” noted 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 careers, which is why it’s so necessary to find ways to make living in these areas more affordable for young adults.”
