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Do you see a lot of these millennials eventually moving out of high cost cities to where they can afford a place?
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Millennials pay a whopping $92,600 in rent by the time they turn 30, despite earning more than previous generations, a new study by industry tracker RENT Cafe revealed Monday.
The study tracks millennial spending from age 22 to 30 using U.S. census data on rents and incomes.
During that eight-year period, millennials earned a total median income of $206,600.
The numbers also show that millennials are devoting 45 percent of their monthly income to rent. That’s more than the recommended 30 percent, and it’s outpacing Gen Xers (41 percent) and baby boomers (36 percent).
Things are even worse for young millennials. They earn a total median income of $207,200 between ages 22 to 30 but pay out $97,400 in rent. And they are devoting 47 percent of their income to rent. Beyond that, Generation Z renters are expected to pay over $102,000 in rent by the time they hit age 30.
You have to live somewhere. Even if you own, you're still paying $X per month for housing. In general, a kid coming out of college at 22 is not going to be able to afford as much as a 29 year old. I made about $30,000 when I got out of college in 2010. My income has since doubled.
This article is focusing on California. There is a ton of upward pressure on rents and prices in most of California. I live in northeast TN. Housing prices in most areas here are doing well to track inflation. It's a totally different market.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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That actually is low here, unless they lived with parents well into their 20s. With the average studio here at $1,600, it's almost $100,000 in just 5 years. Go an hour north or south and it's much less. Another case where you cannot generalize, the location makes a huge difference. That's also showing an annual median income of only $25k, but the millennials that work with me are in the $60-80k range.
Buying a home when they are unlikely to settle in an area isn’t good financial sense in most markets. You have to live somewhere and when career and life trajectory is still flexible, renting makes sense.
I’d hate to tell you how much I spent on my downoayments and mortgages during that same time period, as someone of the same age group. Housing costs are expensive in many markets, and that has made things tough when education costs have so overinflated in the last two decades. But it’s an economic thing, not a millennial thing, specifically.
Horrible article. You'd think the author doesn't actually know what median means... median income is mentioned many times without median rent. And even the sources provided aren't fully listed, so I can see what the ACTUAL study says, not what data was cherry-picked to support the author's insular vision. You can't mix average and median like that.
There's nothing particularly bad about renting except for the fact they never build apartments to have good soundproofing. Around here I can get an apartment with all utilities for $550 a month while buying a house would cost at least $1000/month. If you don't need the extra space it's kind of nice to not have to mow, shovel, etc. It's the noise factor that got me to buy a house. It's a nice house... I can't complain. Thankfully when I was renting the whole "emotional support animal" scamming was not in vogue so I didn't have to listen to barking dogs. I was lucky and had a very quiet unit for something like 8 years combined and when the lease was up they grandfathered in the older price which was about $50/month less than when I left.
Around where I am in Long Island, NY, we see more extended family housing. It is common for kids to live with there parents well into there upper twenties and even 30's until they can afford the price of buying or renting. $1,600 is common for a 1 bedroom. It is hard for any young person to get out on there own without spending half their income, so they often stay with family.
This, *again,* is mixing together average and median. That should.never.be.done.
The Millennial average of $93,000 in rent represents more than what Baby Boomers paid by the same age—and it also represents a staggering 45% of their total median income (which is around $206,600 over the 8 years).
The average housing expenses of everyone my household is $2650/year.
The median income in my household is $3000/yr. (My teen sells her anime art sometimes.)
That ends up [mis]representing that 88.5% of our incomes goes to housing. Staggering indeed... but absolutely false. 12% of our incomes goes to housing.
Do you see a lot of these millennials eventually moving out of high cost cities to where they can afford a place?
——
Millennials pay a whopping $92,600 in rent by the time they turn 30, despite earning more than previous generations, a new study by industry tracker RENT Cafe revealed Monday.
The study tracks millennial spending from age 22 to 30 using U.S. census data on rents and incomes.
During that eight-year period, millennials earned a total median income of $206,600.
The numbers also show that millennials are devoting 45 percent of their monthly income to rent. That’s more than the recommended 30 percent, and it’s outpacing Gen Xers (41 percent) and baby boomers (36 percent).
Things are even worse for young millennials. They earn a total median income of $207,200 between ages 22 to 30 but pay out $97,400 in rent. And they are devoting 47 percent of their income to rent. Beyond that, Generation Z renters are expected to pay over $102,000 in rent by the time they hit age 30.
the first piece of advice I can supply is care about how these national articles, or articles from locations that aren't you're own (when they happen), that you focus on how relevant they are to your market.
In your case, the article speaks to SoCal, and I think that's where you are. Additionally, there's an old saying in real estate that everything starts in CA and moves east. So, anything that speaks to CA is of particular relevance to you.
Beyond that, let's ask our selves the "why". Why are millenials paying such higher rent? Is it that they prefer to live alone....maybe so. Why do they pay for Uber, wake up with Starbucks, and eat out a lot (at least according to the article)?
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