Economy Watch: Cost of Rent a Challenge Across Generations
Of the Millennials and Baby Boomers who rent, 46.5 percent and 49 percent, respectively, spend more than 30 percent of their income on housing costs, according to a new report by ABODO.
By D.C. Stribling, Contributing Editor
Rents are a cost-burden for younger Americans, as might be expected, but also older generations who rent, according to a new report by Abodo. The firm analyzed Census Bureau data to determine renter cost burdens in the 100 most populous MSAs, then divided the data into the three generation groups based on the age of the renter.
Of the 65.5 percent of millennials who rent, 46.5 percent spend more than 30 percent of their income on housing costs, according to the report, taking 30 percent as the threshold for rents being a burden on renters. Of the 37.9 percent of Gen Xers who rent, 44.4 percent spend more than 30 percent of their income on housing costs, and of the 23.3 percent of Baby Boomers who rent, 49 percent spend more than 30 percent of their income on housing costs.
Honolulu, Daytona Beach and Miami are home to the most cost-burdened Millennials, while Miami, Bridgeport, Conn., and Fresno, Calif., are home to the most cost-burdened Gen Xers. Miami, and Riverside and Stockton, Calif., are home to the most cost-burdened Baby Boomers.
By the report’s definition, Millennials are now ages 18 to 34. These renting young adults are less likely to be housing cost-burdened than their older parents and grandparents, even though a recent report by the Federal Reserve found that Millennials earn about 20 percent less than Boomers did as young adults. That’s probably because more of them still live with their parents than earlier generations did.
On the other hand, Gen Xers, aged 35 to 50 with (usually) more established careers, fare the best as renters. Boomers are aged 51 to 69, and they are the generation with the highest percentage of cost-burdened renters, but also the lowest percentage of cost-burdened households overall. Including homeowners, only 11.6 percent of Baby Boomer households face such a burden.