Rent Burden Eases for Gen Z Since 2011 Peak, Yet Remains a Major Challenge

Despite inflation pushing up multifamily rents, a new study from Zillow found that apartment affordability for Gen Z renters has improved slightly compared to a decade ago. While the percentage of young adults spending more than 30% of their income on rent has decreased since its peak in 2011, the share remains high, with nearly 60% of Gen Z renters nationwide still struggling with rent burdens. This burden is even heavier in 21 of the country’s 30 largest metros.

“Rent burden makes it a struggle for these young adults to afford other expenses in their lives—things like student loans and medical payments,” Zillow Senior Economist Kenny Lee said. “The experience of struggling to pay rent on an entry-level salary is familiar to so many of us that it’s almost become normalized in our society.”

Zillow’s comparison with the 2012 American Community Survey shows that 60.2% of young adults spent more than 30% of their income on rent in that year, peaking at 62% in 2011. The percentage gradually declined to 55% in 2019, before climbing again due to a post-pandemic surge in demand and limited new supply.

The percentage of Gen Z renters spending more than 30% of their income on rent varies significantly across the largest cities in the United States. In New York City, 65.6% of Gen Z renters are burdened by high rental costs, while Los Angeles sees an even higher figure at 73.4%. Chicago has a lower percentage at 56.9%, but Miami is close behind with 67.7%. Dallas also reports that 60.4% of its Gen Z renters allocate a significant portion of their income to housing expenses.

Zillow noted that Austin saw the largest decline in the share of young renters spending more than 30% of their income on rent, dropping by 9.5%. Conversely, Houston experienced the largest increase, with a rise of 11.9%.

“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 crucial we find ways to make living in these areas more affordable for young adults,” said Emily McDonald, Zillow’s community manager.

The report comes amid a rebound in demand for multifamily units, according to CoStar. National average asking rents increased by 1.1% in September, with the multifamily market expected to add 636,000 units this year—the largest supply increase in 40 years.

CoStar added that Sun Belt and luxury markets are most at risk of weakening due to oversupply, while the Midwest and Northeast may continue to outperform.