Forty-five percent. That’s the percentage of an average millennial’s income that they’ll spend on rent between the ages of 22 and 30, according to a new study by RENTCafé. That definitely sounds like a lot—as does the $92,600 total amount they spend on rent during that time—but let’s add some context to the raw figure. How does this rent burden compare to that of previous generations?
RENTCafé’s study mined U.S. Census data to determine the each generation’s average income and rent burden during that eight-year window leading up to age 30. As their report states, “we looked at the average income representative for the ages analyzed, rather than the average income of the overall population, because people in their 20s, with limited experience in the workforce, typically have a lower income than those over 40 who are at the peak of their careers.” The data refers to single people paying the rent by themselves, and all numbers were adjusted to 2017 prices.
All that taken into consideration, millennials are indeed carrying a heavier rent burden than other recent generations...but not by as much as you might expect. The millennial rent burden of 45 percent is only slightly higher than the 41 percent carried by Generation X, but quite a bit higher than the average baby boomer rent burden of 36 percent carried during their early adult years. However, the median income of millennials during those eight years is also higher at $206,600 than in the two preceding generations. For comparison’s sake, Generation X typically earned about $202,100 in their twenties and spent $82,200 of that on rent. For Boomers, those numbers were $195,700 earned and $71,000 spent on rent.
Breaking those numbers down further, RENTCafé found that millennials earn on average $10,900 more than baby boomers did in their twenties, but they’re also paying $21,600 more for rent—more than double. The trend also continues within the millennial category itself, with younger millennials paying considerably more during that eight-year window than their older counterparts. According to the RENTCafé report, millennials aged between 22-40 paid a median rent of $97,400 before turning 30, whereas millennials currently aged 30-40 only paid $90,500 during that age span, a difference of nearly $7,000.
Generation Z, now aged around 20 years old, is forecast to have paid an average of $102,100 in rent by the time they turn 30.