KeepPDXHoused Rally and March, September 2016. Photo credit: Benjamin Kerensa / Flickr (CC BY-NC-ND 2.0)

The youngest millennials — Americans born between 1977 to 1995 — graduated college a year ago, but they may soon realize that the initiation into adulthood is a far cry from joining a sorority or fraternity.

As if the twin-scourge of soaring student debt and stagnant wages weren’t bad enough, they also pay much higher rent than previous generations.

From age 22 to 29, the supposed zenith of a human life cycle, the average millennial spends a staggering $93,000 on rent, adjusted to 2017 prices, which translates to roughly 45 percent of their total median income. (The average millennial income over an eight-year period is roughly $206,600.) The rent burdens for Gen Xers and Boomers, at that same age bracket, were 41 percent and 36 percent respectively. Back in the 70s, Boomers paid less than $70,000 on rent during their 20s.

About two-thirds of households headed by young adults are rentals

This predicament isn’t likely to improve much for millennials as they reach their 30s: the older group pays only about $7,000 less than the younger one.

While millennials do make more money than their parents and grandparents did, they’re also more lavish consumers — on everything from wifi and utilities to avocado toasts that rival the monthly cost of wifi or utilities.

But it would be grossly inaccurate to attribute the financial woes of younger millennials solely to careless spending habits. The housing bubble that torpedoed the economy in 2008 drove an exodus of homeowners to the rental market, ratcheting up prices to record levels. Accruing student loans, hefty down-payment requirements, and a re-inflating housing bubble means that homeownership is out of the question in the foreseeable future.

And, if demand for rental properties continues to rise, current high schoolers — the outspoken, tech savvy Gen Zers — will have directed more than $102,000 to rent by the ripe age of 30.

Watch the videos below to learn more about the socioeconomic forces hindering millennials from building a more prosperous future.

Related front page panorama photo credit: Adapted by WhoWhatWhy from for rent sign (Valerie Everett / Flickr – CC BY-SA 2.0).

0 0 votes
Article Rating
Oldest Most Voted
Inline Feedbacks
View all comments
3 years ago

So, the Los Angeles County real estate market was recently valued at roughly $2,7 Trillion Dollars.

That is more dollars than the entire Gross Domestic Product of the UK. In other words, there is more Chinese, Russian, Middle Eastern, South American and other Elite money stuffed into Southern California Real Estate than what the good people of the British produce a year.

The is some Elite foreign direct investment; otherwise known as money laundering, but the US real estate market is totally unregulated, even after the 2008 crash.

So, in that environment, you have properties like a 264 square foot shack in los angeles bel aire area at $550K marketed to “students or young professionals” but really who buys these is hot money; this actual shack was last bought in feb ’18 just over a month ago and now it is back on the market at $550K a nearly $100 thousand increase like 30% in 30 days(check my math).

Point is, how many millennials can play THIS game? or would want to; honestly, LA is turning into 3 New Yorks..

Well it’s not a game, it is an elite war and they’re winning.

3 years ago

Government is the cause of both the high cost of education and the high cost of housing.

They guarantee student loans, which creates the moral hazard of the university not having to worry about the student being able to re-pay. As a result, universities can greatly increase their prices (which has happened in the past couple of decades).

As far as housing, the government also guarantees mortgages. Remember Fannie and Freddie? This created a moral hazard because the lender no longer worried about the buyer being able to pay the money back. This created extra demand because people were suddenly able to get a mortgage that they could afford. That led to the housing bubble (prices kept going up due to this excess demand). Eventually when it popped, the government bailed everyone out, keeping the moral hazard going (which is going on to this day).

Let’s not forget Paul Krugman’s quote from (I think) 2002:

“To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

Steve Ross
Steve Ross
3 years ago
Reply to  MacKenzie

Somewhat simplistic. Few mortgages were government backed of guaranteed. Fannie and Freddie packaged many mortgages but insured few.

Guaranteed college loans were a bigger proportion of the total college loan ecosystem but again not universal. And Bush had privatized them, increasing moral hazard.

Bailout implies government lost money. It actually made $70 billion on loaning Wall Street $700 billion.

Bankruptcy is guaranteed in the Constitution. Yet college loans can’t be discharged in bankruptcy. Why?

lee piazza
lee piazza
3 years ago
Reply to  Steve Ross

Taxes are not dischargable in bankruptcy.

Subscribe to the Daily WhoWhatWhy

Relevant, in-depth journalism delivered to you.
This field is for validation purposes and should be left unchanged.