Nov 15, 2023 - News

Rent is gobbling up young Utahns' income

Share who spend 30 percent or more of their income on housing in the Salt Lake City 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 includes monthly contract rent and utilities paid by the renter while owner costs includes monthly mortgage payments and other debts, utilities, real estate taxes, insurance, etc.; Chart: Simran Parwani/Axios

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.

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.
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