Bad News for Millennials as Affordable Housing is Scarce
Rents are stretching millennial budgets throughout the U.S. Nationally, the typical worker from 22 to 34 years old paid 30 percent of income for rent in the first quarter of 2015, up from 23 percent in 1979, when the analysis begins. In those places, rental unaffordability is a distinct obstacle for people trying to carve out lives and careers, particularly in the nine major cities shown in the chart below, where more than half of households rent.
A couple of forces are making major cities increasingly unaffordable for millennials at the outset of their working lives. Stagnant wages in many cities have made rental and for-sale housing harder for workers to afford.
Not unexpectedly, the poor have suffered most from the dearth of reasonably priced housing. In 2013, 60 percent of low- income renters were severely rent-burdened, meaning they spent more than half their income on rent, according to the Furman report. Middle-class renters are also struggling to find affordable housing.
Millennials, meanwhile, can look forward to longer commutes and a harder time putting money away for a mortgage down payment. Or move to Missouri.
Mom and dad beware. Retailers take notice!