The renter generation: Young Americans, shut -2-

The dream of homeownership is "getting further and further from being a reachable goal for younger generations," she said. A few decades ago, people believed their kids would be homeowners, but "now we're coming to terms with the fact that perhaps most won't. And that's the new normal."

When rent is high - but still less than buying

The high cost of ownership is impacting tenants at all income levels. Even higher-income households, who in previous generations were able to save enough to buy a home, are choosing to rent today. In fact, renter households with incomes over $100,000 have been the fastest-growing segment of renters over the past decade, according to the Aspen Institute, including a growing class of millionaire renters.

Chris Salviati is staying put in his rental in San Francisco, the most expensive housing market in the country, with the median cost of rental listings topping $3,700. Few people follow the movements of the U.S. rental market as closely as Salviati, who has been an economist at Apartment List for nearly a decade. He has two degrees from Boston University.

"For anyone in San Francisco, housing costs are very top of mind," the 36-year-old told MarketWatch.

Chris Salviati and his wife are saving. However, high prices in the San Francisco area have made the decision to buy less clear-cut.

Salviati and his wife have been saving money that might one day be used as a down payment for a home. But with the median sale price in the area at more than $1.5 million, the decision to buy a home has become less clear-cut. The couple are expecting their first child and plan to stay in their two-bedroom apartment for the foreseeable future.

"I'm probably on the cusp" of being a lifetime renter, Salviati said. "If you asked me when I was younger, I probably would have assumed that at some point, I would own a home." Salviati has accepted the possibility that this "may not be the case."

The homeownership rate has grown slower for millennials than for previous generations, "and an early look at Generation Z shows the trend is worsening, not improving," Apartment List found.

Polls show most Americans still want to achieve homeownership, but the majority of people who want to buy a home "are not in a strong financial position to do that," Salviati said. It's no surprise that "we are seeing folks renting later into life than they would have in the past."

In previous generations, twenty-somethings like Mika Alexander, 25, made up a large share of renters. The difference now is their outlook on buying a home in the future. Alexander says she and her friends talk about their housing costs often, and "feel like we won't ever really own a home."

Mika Alexander said she and her friends struggle to imagine owning a home.

Her Denver rent is about $1,500 a month. For more than a year, Alexander's rent accounted for more than one-third of her gross income, making it difficult to save. She recently got a raise, which has helped make the rent feel more manageable.

Alexander, who works as a philanthropy coordinator, feels success isn't defined by homeownership status. Still, she struggles with the lack of control she has as a tenant. She said her landlord hasn't fixed the washer and dryer on her floor in more than a year, and she's constantly concerned about being forced out by rent hikes.

She said the lingering "thought that I might have to move because I can't afford to live here," prevents her from getting too attached to the community, and "that sucks."

Policy solutions are rolling out, but they're not enough

Experts point to a confluence of factors that contribute to making buying and renting homes so expensive. Government red tape and homeowners looking to protect property values (often called NIMBYs) make it difficult to build housing both for entry-level buyers and renters. Even when developers can build, construction costs are high. And a lack of tenant protections combined with an influx of wealthier renters in job hubs allow landlords to keep charging high rates.

Efforts to make housing more affordable have so far failed to meaningfully move the needle. Economists and housing-industry leaders have advocated for more construction to meet the demand for housing after a pullback on construction following the 2008 housing crash severely squeezed supply.

The problem is this is a slow, long-term solution and government efforts have proven insufficient. The construction of income-restricted housing units between 2020 and 2024 increased by 73% compared to the previous five-year period, according to a report by the apartment listing website RentCafe. That's roughly twice the overall growth rate, but the increase in affordable homes has still not been enough to meet demand.

Flaws in commonly used affordability standards also continue to undermine the impacts of new construction: Even when a rental unit is technically affordable by widely-used government standards - with rent capped at 30% of a tenant's income in federal housing programs - many low- and middle-income renters say they still feel squeezed.

This 30% standard, adopted in the 1980s, doesn't account for many financial obligations today's households deal with, including student-debt payments and other large, fixed expenses, such as childcare.

The share of renters' income consumed by housing is "unsustainable, and really detrimental to people's economic well-being, and, to be honest, the economic well-being of the country," said Vincent Reina, professor of urban economics and planning at the University of Pennsylvania.

During the Biden administration, Reina worked with a group to release a renters bill of rights in 2023, in which "renters should have access to housing that is safe, decent and affordable and should pay no more than 30% of household income on housing costs." The initiative never resulted in law.

Some localities have taken up the mantle. They're implementing tenant protections and making zoning changes, like getting rid of single-family zoning in Minneapolis and scrapping a rule in Baltimore that required new buildings to provide a minimum level of parking, which increased costs. The idea behind these reforms is to make it easier to build more rental housing and starter homes.

But even further changes to housing policy may not stem the rise of long-term renters in their 30s and 40s who are planning their lives and finances differently than previous generations.

"They're staying in school longer, which is good for their long-term income, but does that mean that they're going to delay things like marriage and kids and also buying a house and starting to accumulate savings?" said Jenny Schuetz, vice president of infrastructure and housing at Arnold Ventures. "All of this stuff then becomes a feedback loop where it's hard to tell if people are delaying becoming homeowners because of their other life choices, or if their other life choices are because of high housing prices and they think they'll never be able to buy a house."

Broad affordability challenges have made many young people reluctant to form households of their own at all, even as renters. In 2025, nearly half of adults under age 30 lived with their parents, according to the Federal Reserve, an increase of 12 percentage points from 2019.

"The barriers that come from an economic cycle and the uncertainty that comes from that also affects people's housing decisions. They might just say we're going to hang out and see what happens," said Whitney Airgood-Obrycki, a senior research associate at the Harvard Joint Center for Housing Studies.

Amina Hearns has been living with her mother and grandmother in West Covina, Calif., since she graduated from college in 2023, and she helps pay a portion of rent, groceries and utilities. She waited to start looking to move out until she had a steady full-time job, a process that took almost two years.

Hearns, 25, and her friend have been looking for places to rent in Los Angeles, where they both work, but have struggled to find a home in their price range. They recently looked at a 600-square-foot apartment listed for $3,000 a month.

"Do I pay off my student loans first while also paying rent, while also paying all these bills now? Let's add the possibility of saving up for a car," she said. "What if I want to enjoy moments like going to events or go see concerts or go to shows? That also costs money."

For the moment, the financial demands of starting an independent life are more than she and many young people can handle.

-Jillian Berman -Venessa Wong

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