Nearly half of renter households are burdened by rent costs

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The rent burden rises across America. Nearly half of all U.S. renter households are burdened by rent costs, with Gen Z renters shouldering the heaviest load, a new analysis of the U.S. Census Bureau’s 2022 American Community Survey (ACS) by Zillow and its New York City brand StreetEasy shows. Across the country, three in five Gen Z renters (ages 18-25) spend more than 30% of income on housing expenses. In 21 of the country’s 30 largest metros, that share is even higher. In San Diego, Los Angeles, and Sacramento, for example, nearly three-quarters of Gen Z renters are rent burdened.

The picture today for Gen Z-ers is similar to –though slightly improved from – Millennials’ experience a decade before. In 2012, 60.2% of Millennials nationwide spent more than 30% of their income on rent. Rent burden among young adults peaked at 62% in 2011, but steadily declined to 55% by 2019. However, the trend reversed in recent years as surging rental demand following the pandemic – coupled with decades of undersupply – led to sharp rent increases across the country.

“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.”

In 17 of the country’s 30 largest metros, Millennials in 2012 were more likely to experience rent burden than Gen Z renters in 2022. However, the improvement has been modest. In each of those 30 metros, at least half of Gen Z renters are rent burdened. Austin saw the largest decline in the share of rent burdened young adults through the past decade (-9.5%), while Houston saw the most dramatic increase (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,” said 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.”