Almost half of all US renter households are being “burdened” by excessive rent costs, with Gen Z renters shouldering the “heaviest load,” a new analysis of the U.S. Census Bureau’s 2022 American Community Survey (ACS) by real estate firm Zillow (Nasdaq: Z and ZG) and its New York City entity StreetEasy shows.
Across the US, three in five or around 60% of Gen Z renters (ages 18-25) spend over 30% of income on housing expenses. Real estate firm Zillow further noted that in 21 of the country’s 30 largest metros, that “share is even higher.”
In San Diego, Los Angeles, and Sacramento, for example, nearly three-quarters or 75% of Gen Z renters are rent burdened, according to the latest research from real estate firm Zillow.
The picture today for Gen Z-ers is similar to –though “slightly improved from – Millennials’ experience a decade before.”
In 2012, the real estate market report from Zillow noted that 60.2% of Millennials nationwide spent “more than 30% of their income on rent. Rent burden among young adults peaked at 62% in 2011, but steadily declined to 55% by 2019.”
But the real estate and property market update from Zillow pointed out that the trend “reversed in recent years as surging rental demand following the pandemic – coupled with decades of undersupply – led to sharp rent increases across the country.”
Real estate company Zillow also mentioned in its research report that in 17 of the country’s 30 largest metros, Millennials in 2012 were “more likely to experience rent burden than Gen Z renters in 2022.”
But the improvement has been modest. In each of those 30 metros, “at least half of Gen Z renters are rent burdened. Austin saw the largest decline in the share of rent burdened young adults through the past decade (-9.5%), while Houston saw the most dramatic increase (11.9%).”
Real estate company Zillow and StreetEasy have a number of tools “that help renters with affordability and access.”
The upfront costs of finding a place to rent “can add up, with Zillow research showing those costs tend to be higher for renters of color. In New York City, upfront costs average almost $10,500, with broker fees often the largest expense.”
Lowering upfront rental costs will give all New Yorkers expanded choices in the rental market, which is one of the “reasons Zillow and StreetEasy are advocating for broker fee reform.”
For all Zillow rental listings, Zillow includes “a costs & fees breakdown to help renters get a better idea of the affordability picture by highlighting certain one-time costs, such as application fees and security deposits, as well as recurring costs, such as parking.”
The real estate and US property market report also noted that while the typical renter nationally pays $60 in application fees across all the rentals they apply for, Zillow’s rental application allows renters to “apply to an unlimited number of participating rentals on Zillow for 30 days for a flat fee of $35.”
Zillow rental listings also include “rooms for rent — individual rooms in units or homes — bringing more affordable rentals online. Renters using Zillow can include “room” listings in their searches alongside traditional “entire place” options.”
Zillow Group, Inc. claims that it is focused sharply on “reimagining real estate to make home a reality for more and more people.”
As the real estate site focused on the United States, Zillow and its affiliates help consumers get the home they want by connecting them with digital solutions, partners and agents, and easier buying, selling, financing and renting experiences.
StreetEasy is an assumed name of Zillow, Inc. which has reportedly a real estate brokerage license in all 50 states and D.C.