Here Is the Largest Demographic of Renters

While Generation Z singles and couples that entered the rental market in recent years have become the largest demographic group of renters in the country, their impact on regional markets remains largely mixed.

A new study by RealPage found that singles and couples that are part of the TikTok generation and late Millennials now comprise more than half of all renters in the U.S., despite facing higher economic challenges due to their coming of age amid the coronavirus pandemic and subsequent inflationary pressures.

Singles in their late twenties and young couples tend to be significantly more sensitive to economic changes as they tend to have comparably lower incomes than most other groups, RealPage said. These constraints have kept them concentrated in Sun Belt and Midwestern markets rather than coastal areas.

“[Individuals in the demographic] are sensitive to pricing increases and they are the most willing to rent a property with a lower online reputation,” Adam Couch of RealPage said. “Naturally, this cohort struggles when the economy falters.”

The analysis studied more than five million transactions and found that the average age of renters in the U.S. is now 31 years old. This group tends to live in dwellings of approximately 900 square feet and have an average income of $73,000 per year.

Singles in their mid-to-late twenties comprise approximately 27% of all renters in the country and spend an average of 27% of their income on rent. By contrast, affluent singles and established married couples spend less than 18% of their monthly income on rent.

RealPage found that twenty-something renters, who are single, earn $46,000 per year on average and tend to rent Class C and D units in cities with early career opportunities such as Atlanta, Dallas and Houston. These economic constraints have also kept their largest concentration in Midwest and Sun Belt markets.

Although they comprise a sizeable percentage of all renters in metropolitan areas like Memphis (45%), Indianapolis (39%), and Columbus (35%), Gen Z singles are far less concentrated in regions like New York City (10%), Los Angeles (8%) and San Francisco (6%), where fewer young adults can afford to live.

These evolving demographic trends will play a crucial role in shaping new developments and addressing the economic challenges faced by both new and existing renters, according to RealPage. These trends are also likely to influence how employers and landlords engage these early career professionals.