The oldest Millennials are turning 40 this year and affordable housing remains a top concern for many in this generation. Rising housing costs, a scarce supply, lack of new construction, increased debt, and stalled wage growth are just some of the burdens this age bracket faces. One-third of older Millennials, born between 1981 and 1989, say their most burdensome monthly expense is housing, reports CNBC. According to a study by the PM Group, Millennial budgets are already stretched thin, with the typical Millennial spending 30% of their income on rent in 2015. The average older Millennial, according to CNBC’s study, takes home $3,200 a month yet spends a median of $1,200 on housing costs.
But that same cohort only takes home about $3,200 a month in pay, which means the typical older millennial is paying more than the recommended 30% of their income on housing. Many are spending more than 37%.
Long term, spending that much or more for housing may hamper millennials’ ability to afford other necessities and save for the future.
Scarcity driving up housing costs
Finding affordable housing is a challenge across generations. In 2019, before the Covid-19 pandemic hit, about 37.1 million U.S. households paid more than 30% of their incomes for housing, according to the latest State of the Nation’s Housing report by the Harvard Joint Center for Housing Studies. Of those, about 17.6 million were spending more than 50% of their incomes on housing.