More than half of Gen-Z spends more than 30% of its income on rent
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Cleveland Generation Zers are carrying a hefty burden when it comes to monthly housing payments.
Driving the news: More than half (52%) of renters ages 15 to 24 spend at least 30% of their income on rent, according to the latest U.S. census data.
Why it matters: Steep prices and mortgage rates pose seemingly insurmountable hurdles to homeownership — and renting isn't necessarily an affordable alternative.
- Spending 30% of your income on rent is "the new normal," according to economists at Moody's Analytics.
By the numbers: Things aren't much better for local Gen Z homeowners, with 41% spending 30% or more of their income on housing.
Meanwhile, one in three Gen Zers (34%) nationwide surveyed by Freddie Mac say owning a home feels impossible in their lifetime, up from 27% in 2019.
- Saving for a down payment is the biggest obstacle, they say: It's one reason the typical first-time homebuyer last year was a record-high 36 years old, per the National Association of Realtors.
The big picture: Across the U.S., pinched young people are fanning out from big cities, returning to their childhood bedrooms or moving in with partners.
- In all of the 100 biggest U.S. metros, over one-third of 15- to 24-year-old householders who rent spend 30% or more of their income on housing, Axios' Simran Parwani reports.
Zoom out: America's housing shortage has helped hike the cost of both buying and renting.
Yes, but: The vast majority of young renters are renting for lifestyle reasons, preferring the flexibility to move, RealPage chief economist Jay Parsons tells Axios.
- Many Gen Z renters have lower incomes but also lower bills beyond rent, which allows them to live in pricier locations, according to Parsons.
Go deeper: Student loan interest has started again, adding to affordability pressures