A new analysis of the U.S. Census Bureau’s 2022 American Community Survey (ACS) by Zillow reveals that nearly half of all renter households in the U.S. are struggling with rent costs, with Gen Z renters shouldering the heaviest load.
- The report highlights that 55% of Gen Z renters are considered rent burdened, meaning they spend more than 30% of their income on rent.
Better Than Millennials: In 2012, 60.2% of Millennials nationwide spent over 30% of their income on rent. The share of rent-burdened young adults peaked in 2011 at 62%, before gradually declining to 55% by 2019.
- However, that trend reversed in recent years, as surging rental demand following the COVID-19 pandemic, combined with decades of housing undersupply, drove up rental prices across the country.
Texas Spectrum: The analysis reveals striking regional differences, with Texas standing out on both ends of the spectrum. In Austin, the share of rent-burdened young adults dropped by 9.5% over the past decade, marking the largest decline among major U.S. cities.
- Conversely, Houston experienced a significant increase, with 11.9% more young adults becoming rent-burdened.
Don’t Go West: Meanwhile, California remains one of the toughest states for young renters. In San Diego, Los Angeles, and Sacramento, nearly three-quarters of Gen Z renters are rent burdened. The state’s restrictive building regulations are a key factor in these high rent burdens, making it difficult for new housing supply to keep up with demand.
What They’re Saying: Emily McDonald, a Zillow Rental Trends Expert, offers insight into why Gen Z renters continue to flock to pricey metropolitan areas despite the steep rent costs. “While these large metropolitan areas may be known to have more expensive housing, we have to recognize that they’re also where the jobs are,” McDonald says. “For many Gen Z renters, choosing to live in a less expensive city may come at the expense of their career, which is why it’s so necessary we find ways to make living in these areas more affordable for young adults.”
Bottom Line: Although Gen Z renters might be slightly less rent burden compared to Millennials a decade ago, the bar was set low. The ongoing challenge of undersupply, paired with high demand, continues to strain renters, particularly young adults. Until building regulations adapt to better match the actual demand for housing, rent burden will likely remain a persistent issue for many Americans.
