Oct 7, 2023 - Real Estate

Most young Denver renters spend 30% of their income on rent

Illustration of two keys crossed over one another with a beam of light behind them

Illustration: Natalie Peeples/Axios

Roommates and side gigs help Denver Gen Zers offset the high cost of housing.

Why it matters: Steep prices and mortgage rates pose seemingly insurmountable hurdles to homeownership β€” and renting isn't necessarily an affordable alternative.

Driving the news: 1 in 3 Gen Zers surveyed by Freddie Mac say owning a home feels impossible in their lifetime, up from 27% in 2019. The shares are higher for Black (35%) and Hispanic (50%) respondents.

  • 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.

Zoom in: Gen Zer Ana Marcks works in cyber security and has a TikTok side gig. With multiple streams of income and a roommate, she spends 15% of her take-home pay on rent for her Lower Downtown apartment.

  • For her, homeownership is a long-term goal, but she's not in a rush to buy β€” especially in Denver where housing is so expensive, she says.
Share who spend 30 percent or more of their income on housing in the Denver area, 2022
Data: Census Bureau; Note: Based on household income. Householder is the person/people in whose name the housing unit is owned or rented. Renter housing costs include monthly contract rent and utilities paid by the renter while owner costs include monthly mortgage payments and other debts, utilities, real estate taxes, insurance, etc.; Chart: Simran Parwani/Axios

Most of Denver's youngest renters are spending at least 30% of their income on rent, the latest U.S. census data show.

  • In all of the 100 biggest U.S. metros, over a third of 15- to 24-year-old householders who rent spend 30% or more of their income on housing, Axios' Simran Parwani reports.

What's happening: Across the U.S., pinched young people are fanning out from big cities, returning to their childhood bedrooms or moving in with partners.

  • Fannie Mae researchers found 30% of young workers are willing to live farther away from the office for more inexpensive housing.
  • Nearly a third of Gen Z adults say they're living at home long-term, The New York Times 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.

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