A total of 43 million American households lived in rental housing in 2016, and of that number 47.7% were cost-burdened, according to the U.S. Census Bureau's 2015 American Community Survey, meaning these consumers spend more than 30% of their income on housing.

In Renter Cost Burdens by Generation, ABODO examines the generational spread of housing cost burdens, from millennial renters just beginning their professional lives to the growing number of baby boomers downsizing from single-family homes to rental properties. The Madison, Wis.–based apartment-search firm in its report also shows which MSAs have the largest percentage of cost-burdened renters in each generation and how these burdens affect the quality of life for each age group.

Renters by Generation

Overall, 45.6% of renting millennials (defined here as renters ages 18 to 34) face a housing cost burden, compared with 30.5% of all millennial households. Millennials are generally lower earners than their older counterparts and haven’t had as many years to build up savings. On top of that, a report from the Federal Reserve estimates that millennials are earning 20% less than their baby boomer parents did as young adults.

Despite this, young adult renters are actually less likely than older renters to face a housing cost burden—if only by a small margin. Almost half, 49%, of baby boomer renters (defined as those ages 51 to 69) are cost-burdened, compared with 11.6% of baby boomer households overall. Renters in Generation X, currently ages 35 to 50, are faring the best as renters out of all three groups—44.1% of renters in this group are cost-burdened, compared with 16.8% of all Gen X households, notes the ABODO report.

Across all three generations, homeowners seem to be more financially secure than renters, especially in the baby boomer age group.

Renters by Geography

The millennial generation has the most renters of any generation, at 65.5%. These renters are paying a median gross rent (utilities and related costs included) of $980 on a median household income of $39,900, or 29.5% of income spent on housing.

Nationwide, 46.5% of millennial renters are cost-burdened, but ABODO has found this percentage varies widely by region. In urban Honolulu, 68.9% of renting millennials, or over two-thirds, face a cost burden. Deltona–Daytona Beach–Ormond Beach, Fla., is close behind, at 61.3%.

Eight of the top 10 markets for highest percentage of cost-burdened millennial renters are in Florida or California, and every one of the top 10 markets exceeds the 50% mark.

By comparison, only 37.9% of Gen Xers are renters. While this generation pays the highest median rent, at $1,050, it also has the highest median income, $44,700. Miami–Fort Lauderdale–West Palm Beach, Fla., has the highest percentage of cost-burdened Gen X renters, at 58.1%, followed by Fresno, Calif., at 54.3%.

Many of the same cities appear on both the millennial and Gen X top 10 lists. In each city, the percentage of cost-burdened Gen X renters is lower than the percentage of corresponding millennials, though the top-10 percentages all remain above 50%. ABODO notes that while many Gen Xers have moved on to homeownership, residents in the most expensive cities still struggle with the cost of rent.

These households are also the most cost-burdened on a national scale, likely due to having fixed incomes in retirement or semi-retirement. Renting baby boomers do pay the lowest median rent, at $890, but they also earn the lowest median salary, at $33,000.

Again, a few of the markets in the top 10 for this age group overlap across generations. Miami–Fort Lauderdale–West Palm Beach, Fla., is at the top of the list, with 60.9% of baby boomer renters facing a cost burden. Riverside–San Bernardino–Ontario, Calif., came in second, at 59.0%.

Unlike millennials and Gen Xers, the baby boomers’ top 10 MSAs by cost-burdened households include two Midwestern markets. In Grand Rapids–Wyoming, Mich., 55.6% of renters are cost-burdened, along with 55.2% of renters in Youngstown–Warren–Boardman, Ohio–Pa.

While renting may be a lifestyle choice for some, the rising cost of housing and the prevalence of cost-burdened households keep homeownership out of reach for many young renters, especially millennials with low earning power.

Given the large number of Millennial renters who wish to be homeowners, concludes ABODO, cost burdens affect the health of the for-sale housing market as much as they do the decisions made in the rental market.