The housing market is changing, and it appears that Generation Z renters are finding it slightly easier to afford rent compared to millennials at the same age.
A recent analysis shows that the percentage of Gen Z renters who are considered rent-burdened has decreased. In 2022, 58% of Gen Z renters faced this financial strain, which is a slight improvement from the 60% of millennials who experienced similar burdens in 2012.
This trend is particularly evident in cities like Austin, Texas, where the rental landscape has changed significantly. In Austin, the percentage of rent-burdened Gen Z renters has dropped from 69% for millennials a decade ago to 60% for Gen Z.
Phoenix, Arizona, is another city where Gen Z renters are faring better than millennials. The percentage of rent-burdened Gen Zers in Phoenix stands at 55%, down from 64% for millennials in 2012.
St. Louis, Missouri, also showcases a favorable environment for Gen Z renters, with a decrease in the percentage of rent-burdened individuals from 58% for millennials to 50% for Gen Z.
However, in Orlando, Florida, the percentage of rent-burdened individuals has risen to 69% for Gen Z, compared to 75% for millennials in 2012.
Pittsburgh, Pennsylvania, rounds out the list with a decrease in the percentage of rent-burdened Gen Zers from 55% for millennials to 50% for Gen Z.
The increase in new construction across these cities plays a crucial role in shaping the rental market. As cities like Austin and Phoenix continue to expand their housing supply, the dynamics of the rental market are likely to evolve further.
Effective budgeting is essential for Gen Z renters, with experts recommending keeping housing costs under 30% of gross income. It is also important for renters to be aware of the various upfront and recurring costs associated with leasing a property. By understanding these expenses and market trends, young renters can position themselves for success in an ever-changing economic environment.