Apartment rents that keep rising are great for landlords and owners. But for renters, especially younger ones, they’re becoming a financial burden.
A new report by RENTCafe found that higher apartment rents are a challenge especially for Millennials. RENTCafe found that Millennials spend an average of $92,600 in total on rent by the time they turn 30. Millennials do earn the highest median income from the ages of 22 to 30, $206,600. But because rents keep increasing, Millennials do spend an average of 45 percent of this income on rent from the ages of 22 to 30.
That rent burden is higher than what other generations have faced. RENTCafe found that members of Generation X spent 41 percent of their incomes on rent during their 20s while Baby Boomers spent 36 percent.
But what about the generation coming up after Millennials? RENTCafe predicts that members of Generation Z, many of whom are now about 20 years of age, are expected to pay about $102,000 in rent during their 20s.
The question? How much higher can rents go before younger people are priced out of the market? It’s already a challenge for young renters to find affordable apartment units in the center of big cities such as Chicago, Minneapolis or Kansas City. If rents keep rising in urban centers, will only the wealthiest potential renters be able to afford apartments there?
Check out RENTCafe’s blog post on this topic to learn more aobut how paying rent is more of a challenge for younger generations.