Nov 1, 2023 - News

Older Detroiters, Gen Z spend 30% of income on rent

Share who spend 30 percent or more of their income on housing in the Detroit 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

Both Gen Zers and older people in Detroit are spending a big chunk of their paychecks on rent.

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

By the numbers: In 2022, 56% of Metro Detroit renters 24 and younger spent 30% or more of their income on housing, while 58% of renters 65 and older spent 30% or more, according to the most recent U.S. Census data.

  • That percentage is lower for homeowners in every age range, but a down payment to become one remains a huge obstacle.

Driving the news: One in three U.S. Gen Zers (34%) 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.

Yes, but: The vast majority of young renters do so 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.

The bottom line: America's housing shortage has helped hike the cost of both buying and renting.

💭 Sam's thought bubble: Myself and most every single Gen Zer I know are among this group. With student loan payments back on, it seems like saving money is impossible.


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