Gen-Z is spending 30% of income or more on rent in Philly
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The majority of Philadelphia's Gen-Zers are coughing up at least 30% of their income for rent, according to the latest U.S. census data.
Why it matters: Steep prices and mortgage rates pose seemingly insurmountable hurdles to homeownership — and in many places 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.
Driving the news: 60% of Philly's Gen Z renters are paying at least 30% of their earnings on rent, compared to 56% of homeowners, per Census data.
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.
- Across the 100 biggest U.S. metros, over one-third of 15- to 24-year-olds who rent spend 30% or more of their income on housing, Axios' Simran Parwani reports.
Zoom in: Saving for a down payment is the biggest obstacle to homeownership, Gen Z-ers 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.
Between the lines: Philly has an affordable housing crisis, which some predict will worsen over the next decade as average asking rents continue to rise.
Threat level: The deepening crisis has contributed to the displacement of low-income residents from North, West and South Philly as those areas gentrify, Nora Lichtash, a spokesperson for The Philadelphia Coalition for Affordable Communities, tells Axios.
- "People are really struggling to pay the rest of their bills because their housing costs are so high," she says. "There just isn't enough left over."
Zoom out: One in three Gen Z-ers (34%) nationwide 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.
Meanwhile, America's housing shortage has hiked the cost of both buying and renting.
Yes, but: The vast majority of young renters in the U.S. 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.
Reality check: Older Americans on fixed incomes are especially burdened by high housing costs, contributing to rising homelessness among Baby Boomers, The Wall Street Journal reports.
Go deeper: Student loan interest has started again, adding to affordability pressures.