Generation Z Will Pay $226,000 in Rent in their Lifetime, According to HotPads
Generation Z can expect to spend $226,000 on inflation-adjusted rent in their lifetime — about $24,000 more than millennials and $77,000 more than baby boomers, according to a new analysis from rental search platform HotPads.
HotPads analyzed U.S. government data and HotPads rental data to determine how many years each generation spent or will spend renting in their lifetime, as well as how much total rent each generation paid or can expect to pay.
While Generation Z can expect to pay more in rent than past generations, they may become homeowners slightly sooner than millennials. If historical trends hold, Generation Z is on track to spend less time renting than millennials.
Baby boomers rented for about 10 years before half the generation became homeowners, millennials will rent for 12 years to reach that point, and Generation Z will rent for 11 years.
Though the oldest members of Generation Z are just entering the housing market as renters, they have a high regard for homeownership — more than half of Generation Z renters say they considered buying during their search, and they are just as likely as older generations to consider homeownership part of the American Dream.
However, saving for a down payment on a home has become more difficult as rents rise, making it harder for younger generations to buy a home. Nationally, the current median rent was about $1,418 in March 2018, up 1.6 percent over the past year.
Rising home values can also affect renters’ ability to save for a down payment. The current median home value in the U.S. is about $213,100, up 8 percent year-over-year In order to put 20 percent down on the median home, renters would need to come up with $42,600.
In 1974, when many baby boomers were just entering adulthood, the median home value in the U.S. was equivalent to $182,800 today.
The gap between Generation Z’s total lifetime rent and millennials’ total lifetime rent is widest in San Francisco, San Jose and Los Angeles — median rent in these metros is more than double the national median. Cleveland, Baltimore and Cincinnati have the smallest gap in lifetime rent paid between Generation Z and millennials.
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