renting vs owning

Here's how much Gen Z Houstonians will have spent on rent before hitting 30

Gen Z will need a lot more than what's in this jar to pay their rent.

Gen Z adults have proven to be huge fans of moving to Texas, and they have a special appreciation for Houston in particular. Still, the price of housing in the city is taking a big bite out of their wallets.

A new housing cost analysis from RentCafe, published March 26, has revealed Gen Z adults living in H-Town are expected to spend a total of $135,223 on rent by the time they are 30 years old.

While the initial amount seems shocking, it really means Gen Z Houstonians will spend an average of $1,408.57 on monthly rent from the age of 22-29 years old, or about $16,903 a year, based on the report's findings.

For comparison, millennials spent a good chunk less on their Houston rent during the same time period in their lives. The average rent cost for a millennial living in the big city came out to $123,000 by the time they were 30 years old. That amount can be extrapolated into a monthly rent cost of $1,281.25 (or $15,375 annually) from the age of 22-29.

For the purpose of the study, RentCafe defined a Gen Z adult as a person who is born between 1996 and 2000. Millennials are defined as adults born between 1981 and 1996. The study examined the average amount of money each generation spent (or would spend) on renting versus owning, and the average total income earned during the same period. Data was calculated based on an eight-year period between the ages of 22 and 29 for each generation, and all costs and income were adjusted for the 2023 value of the U.S. dollar.

Homeownership costs for Gen Z adults living in Houston
RentCafe determined homeownership is also much further out of reach than renting for Houston-based Gen Z'ers. If a Gen Z adult (somehow) buys a house at age 22, they will have spent nearly $204,052 on homeownership costs by the time they're 30 years old (excluding the down payment).

These findings show the difference between renting versus owning for Gen Z'ers in Houston is a whopping $68,829 gap.

Using the same method from earlier, it can be presumed a 22-year-old Gen Z homeowner would be spending nearly $2,126 a month (or about $25,507 annually) to own a home in the Bayou City for the eight-year period until their 30th birthday. That includes the mortgage, fees, and insurance.

For additional context, Houston-based millennials spent an average of $193,670 on homeownership by the time they were 30. That breaks down to $24,208.75 for eight years, or about $2,017.40 monthly.

The difference between renting versus owning for millennials is $70,670, the report found.

Total household income earnings by age 30
By the time an Houston-residing Gen Z adult reaches their 30th birthday, RentCafe says, they will have earned a total household income of $495,619 for the eight-year period. This can be roughly calculated to about $61,952.38 in annual income during that time.

Assuming a Gen Z adult rents for that entire period, they would be spending about 27 percent of their total household income on rent from age 22-29. If they own a home for the majority of their 20s, they would be spending about 41 percent of their total household income on homeownership.

Meanwhile, millennials living in Houston were fortunate to earn much more than Gen Z'ers are making now. The report found that the average millennial Houstonian made $531,160 in total earnings by the time they reached age 30, or $35,541 more than Gen Z's total income. That would assume the millennial was making $66,395 a year while in their 20s.

Millennials also fared better with their housing costs than Gen Z adults are now. Houston-based millennials who only rented from the age of 22-29 spent about 23 percent of their total income on rent, while millennial homeowners spent nearly 36 percent of their total earnings on their housing costs.

The full report can be found on rentcafe.com.

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rent report

New report reveals how many Texans are paying too much for rent

Photo by Francesca Tosolini on Unsplash

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Millions of Texas renters, both current residents and new arrivals, suffer from wallet whiplash.

A new report from the Texas Affiliation of Affordable Housing Providers shows 45 percent of the state’s renters spend more than 30 percent of their income on housing. Renters occupy more than 4.2 million Texas households, representing nearly half of the state’s residents.

Worse yet, 81 percent of extremely low-income households in Texas spend more than 50 percent of their income on housing, the report says. For that income group, Texas has a shortage of 864,000 affordable homes.

Thirty percent is the standard financial benchmark for spending too much income on rent, while 50 percent puts a renter in the “severely cost-burdened” bucket.

“To sustain growth and secure future prosperity, Texas will need more than 320,000 additional affordable homes [rented and owned] to address workforce housing affordability and meet the demands of a growing population,” says the report.

“Today, the state is creating thousands of new jobs,” the report adds, “but housing supply has not kept pace with demand, driving up housing costs and constraining continued economic growth.”

Not surprisingly, people who live in or move to three of Texas’ biggest metro areas get hit with the state’s highest apartment rental rates. Here’s Apartments.com’s list of the 10 most expensive places for renters in Texas, based on apartments whose average size ranges from 713 square feet in Austin to 771 square feet in Plano:

1. Frisco — $1,477 per month
2. Plano — $1,461 per month
3. Austin — $1,417 per month
4. Dallas — $1,413 per month
5. McKinney — $1,363 per month
6. Grand Prairie — $1,327 per month
7. Irving — $1,318 per month
8. Garland — $1,237 per month
9. Fort Worth — $1,217 per month
10. Houston — $1,183 per month

San Antonio boasts some of the lowest average rent among Texas’ 10 most affordable markets: $1,075 per month. Mesquite, a Dallas-Fort Worth suburb, also fits into that category, with average monthly rent of $1,052.

Earlier this month, Gov. Greg Abbott announced more than $114 million in grants to help develop or rehabilitate properties, providing more than 4,400 affordable rental units.

“As our state grows, we must ensure that Texans have access to the affordable housing they need to thrive,” Abbott says.

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