Rent is gobbling up young Utahns' income
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More than half of Salt Lake's youngest renters spend at least 30% of their income on housing, 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 at least 30% of your income on rent is "the new normal," according to economists at Moody's Analytics. Conventional wisdom holds that 30% is the maximum share of income that should go to housing.
Driving the news: One in three Gen Z-ers (34%) surveyed last year 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.
- It takes more than 10 years on average to save up for a typical home in Utah, and you now need a household income of at least $140,000 to cover a median mortgage in Salt Lake City.
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 people who rent spend 30% or more of their income on housing, Axios' Simran Parwani reports.
Zoom in: That's true for all age groups in each of Utah's top five metro areas: Salt Lake, Provo-Orem, Ogden-Clearfield, Logan and St. George.
- More than 45% of 15- to 24-year-old renters are spending at least that in all five metros.
Yes, but: Many young renters are renting for lifestyle reasons, preferring the flexibility, RealPage chief economist Jay Parsons tells Axios.
- Gen Z renters have relatively low incomes — but also lower bills beyond rent, allowing them to live in pricier locations, according to Parsons.
Of note: More than half of renters over age 65 are spending over 30% of their income on rent — though most older Utahns are homeowners, not renters.
- Older Americans on fixed incomes are increasingly burdened by high housing costs, contributing to rising homelessness among baby boomers, the Wall Street Journal reports.