A recent study by RentCafe has revealed that Generation Z will spend an average of $145,000 on rent by the time they turn 30, which is a 14% increase compared to Millennials' rental costs at the same age. The study, which examined housing costs and spending patterns in nearly 200 U.S. metropolitan areas, also found that purchasing a home would be more expensive for Gen Z, with an average cost of $165,000, excluding a down payment.
The research, based on IPUMS data, indicates that while the cost of homeownership for Gen Z is slightly lower than the $172,000 spent by Millennials, it still represents a considerable financial commitment. However, Gen Z is projected to out-earn Millennials in their twenties, with expected average earnings of $550,000 compared to Millennials' $478,000.
Housing expenses for Gen Z vary widely by location. In California, for instance, Gen Z renters are expected to pay up to $300,000 by age 30, particularly in high-cost cities like San Francisco and San Jose. Homeownership in these areas could reach around $470,000. Other expensive metro areas include New York, with projected rental costs for Gen Z at $226,000, and Washington D.C., where rent could amount to $212,000 by the age of 30.
The RentCafe study provides a detailed comparison of rental and homeownership expenses for Gen Z versus Millennials, offering insight into the evolving landscape of housing affordability for younger generations. This analysis is part of RentCafe's broader research into the real estate market, which includes city-specific insights and in-depth market analysis.
The information for this article is based on a press release statement from RentCafe, a nationwide apartment search website and part of Yardi, known for its original city-based research and market analysis.
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