Zillow Releases Housing Trends Report on Renters
Seattle, WA, November 19, 2019-As rents continue to steadily rise across the U.S., about a quarter of renters say affording their rent payments is difficult or very difficult, according to the 2019 Zillow Group Consumer Housing Trends Report.
To make ends meet, two-thirds of those renters make at least one financial sacrifice to afford their home, and half wouldn't be able to afford an unexpected $1,000 expense.
Discretionary spending on leisure activities is the most likely to go-spending on entertainment was cut by 38% of renters, making it the top response. Supplementing income is the next most common course of action, especially for younger renters. A quarter of all renters pick up a second job or more hours at their current job.
With affordability challenges growing in much of the country-renters typically spend a larger share of their income on rent than they did a year ago in 28 of the 35 biggest markets in the U.S.-42% of renters said that they ended up in a location outside of the area they initially considered. The most common reason was not being able to afford homes in their preferred neighborhood.
Younger renters more often make sacrifices than their older counterparts. Three-quarters of Generation Z renters and 69% of millennial renters make at least one sacrifice, higher than the 60% of Generation X renters and 53% of baby boomer and silent generation renters who report the same.
Renters who are burdened with debt are much more likely than those without debt to make at least one financial sacrifice-73% of those with debt do so compared to half of those without. More than two-thirds of renters have some type of debt, including 32% with student debt, and about a quarter of renters say debt has caused them to be denied a rental agreement at some point.
About half of renters (49%) feel they are about maxed out financially and say they would not be able to afford an unexpected $1,000 expense, well above the 20% of homeowners who said the same. Renters report feeling more stretched as they get older-62% of baby boomer and silent generation renters would not be able to afford this expense, while 40% of Gen Z and 46% of millennial renters would not be able to.
Parents with children in the home more often make sacrifices than renters without children. They are more likely to pick up additional work (28%), reduce monthly payments for technology services like a cell phone or cable plan (23%), and cut savings towards a down payment (13%), college savings (9%) or insurance coverage (7%).
Despite making more sacrifices than their peers in other age groups, only 18% of Gen Z renters say affording their rent is difficult or very difficult-around 30% of all other age groups say the same. This may be because 20% of Gen Z renters are helped with their rent by parents or another family member.