As the real estate landscape continues to evolve, a new study sheds light on the significant financial burdens faced by Gen Z as they navigate housing in their 20s. According to recent research conducted by RentCafe, by their 30th birthday, members of Gen Z will have spent a staggering $145,000 on rent—14% more than their Millennial predecessors did in the same timeframe.
This study, which delved into historical housing costs and spending patterns in nearly 200 U.S. metros using IPUMS data, provides invaluable insights into the shifting dynamics of homeownership and rental affordability across generations.
Key findings reveal that while Gen Z individuals shell out $145,000 on rent by age 30, the cost of homeownership for this generation, excluding the down payment, averages at a daunting $165,000. Comparatively, Millennials faced lower rental costs—approximately $127,000—by the time they reached their 30s. However, the path to homeownership was pricier for Millennials, with an average cost of around $172,000.
How much Gen Z spends on rent | via RentCafe
Despite the financial hurdles, there’s a silver lining for Gen Z. Projections indicate that this generation is poised to earn higher incomes than their Millennial counterparts. Zoomers are expected to rake in an average of $550,000 in their 20s, surpassing Millennials’ earnings of $478,000 during the same life stage.
Unsurprisingly, the geographical location plays a pivotal role in shaping these housing dynamics. Major tech hubs in California emerge as the metros where Gen Z faces the highest rental costs. San Jose leads the pack, with Gen Z renters spending a staggering $296,000 on rent by the time they hit 30. Not far behind is San Francisco, where rental costs accumulate to an eye-watering $287,000. In Atlantic City, the cost to rent by 30 years old is $164,992 for Gen Z renters.
On the East Coast, major urban centers also come with hefty price tags for renters. In Boston, Gen Z individuals shell out approximately $234,625 on rent by the time they reach 30. Meanwhile, in New York City, the figure stands at $226,230, underscoring the financial challenges associated with urban living for younger generations.
These findings underscore the pressing need for policymakers, urban planners, and stakeholders to address the affordability crisis in housing. As Gen Z grapples with soaring rental costs and formidable barriers to homeownership, proactive measures must be taken to ensure equitable access to affordable housing options for all.
The journey to 30 for Gen Z individuals is marked by substantial financial investments in housing, surpassing those of their Millennial predecessors. As they navigate these challenges, it’s imperative to foster an environment conducive to sustainable and inclusive homeownership opportunities, enabling future generations to thrive and prosper in an ever-changing housing landscape.
About the Author/s
Tom is a lifelong New Jersey resident, Rutgers and FDU alumni and the publisher of The Digest.
