Why is it called “wasting?” Because after you pay rent….that money is gone. No equity, no tax benefits, nothing. While home prices have increased for 72 straight months of year-over-year gains (according to the National Association of Realtor’s Existing Home Sales Report), millennials that pay rent have missed out on that appreciation.
According to a new study by Rent Cafe, the average millennial spends nearly $100,000 on rent by the time they turn 30 which is around 45% of their income.
Other key findings in their report:
- Millennials pay a whopping $92,600 in total rent by the time they turn 30. Although they earn more compared to previous generations, they also have to spend more on rent.
- By the time Millennials might be thinking about buying a home or starting a family, they are struggling with rent and student loan debt instead. Compared to Baby Boomers (36%) and Generation X (41%), Millennials have to cope with a 45% rent burden in their 20s.
- Because of the ever-increasing rents, discrepancies appeared within the same generation as well. With a rent burden of 47%, younger Millennials (20 – 29) surpass older Millennials who spent about 44% of their income on rent between the ages of 22 and 30.
- If this trend continues, Gen Z-ers are expected to pay something in the vicinity of $102,000 while in their 20’s just to put a rented roof over their head.
Millennials paid much more in rent than what their Baby Boomer parents paid by the time they hit the same age. It seems that Millennials do put a massive amount of money into renting, but the numbers also show that their total median income is the highest among generations, earning about $206,600 in 8 years.
Reposted courtesy of Kelly Lynch • Loan Specialist • KPL Select Mortgage, Inc. • NMLS 311205 • 818.907.5757 • firstname.lastname@example.org