Oct 11, 2023 - Real Estate

Two-thirds of Seattle-area Gen Z renters are rent-burdened

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

Nearly two-thirds of the Seattle area's youngest renters spend at least 30% of their income on rent, 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 — the maximum advised by many experts in the past, and a common standard for being considered rent-burdened — is now "the new normal," according to economists at Moody's Analytics.

Zoom in: In the Seattle metro area, 64% of renters ages 15–24 spent 30% or more of their income on rent last year.

  • That's far higher than the rate among local renters 25 to 64. Among those renters, 43% to 44% spent at least 30% of their income on rent last year, per census data.

The big picture: One in three Gen Z-ers (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.

What they're saying: Higher interest and inflation rates have also made things harder for young buyers, John Manning, the managing broker of Re/Max Gateway in Seattle, told Axios.

  • "We're seeing a lot of younger folks who qualified to buy a house last year and now they're no longer qualified," he said.

Yes, but: The vast majority of young renters are renting for lifestyle reasons, preferring the flexibility to move, RealPage chief economist Jay Parsons told Axios.

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.

  • In the Seattle area, 61% of renters over 65 spent at least 30% of their income on housing last year.

Go deeper: Student loan interest has started again, adding to affordability pressures.

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