The Cost of Housing and the Case for Lifestyle Travel for Millennials & Gen Z
The Case for Lifestyle Travel
Millennials and Gen Z are renting longer and at higher rates. Spending on rent does not build wealth. The primary benefit of that cost is a place to live. The need for lodging can be filled in other ways and applying rent to lifestyle travel instead of long term housing provides additional benefits:
1. Cost Flexibility – Lifestyle travelers will likely split time in a variety of locations, paying a range of prices rather than one fixed price for rent each month. In Phoenix, the median rent price is $1171/mo. vs. $2650 in NYC (Business Insider). That price range varies even more when considering stays in rural areas and international lodging. Lifestyle travelers can manage high rent burden (detailed below) by choosing stays in lower cost markets to offset periods with higher lodging expenses.
2. Cost Savings – Lifestyle travelers may pay no rent for short term stays like camping, professional trips, or holiday travel. Long term renters, in comparison, make a fixed payment each month regardless of whether they use the space. Lifestyle travelers both avoid rent waste (from paying for unused lodging while traveling) and may have periods of free lodging that again reduce their overall rent burden.
This flexibility allows lifestyle travelers to spend less over time and be more creative and deliberate with where and how they live.
Home Ownership by Age
- 27.2% of people under 25 own homes (Gen Z)(U.S. Census)
- 35.6% of people 25-29 own homes (Millennial)(U.S. Census)
- 50.1% of people 30-34 own homes (Millennial)(U.S. Census)
- 61.0% of people 35-39 own homes (Millennial)(U.S. Census)
- Compared to 67-82% of other age groups.
Renters by Age
- Under 30 years old: 49% rent (Statista)
- 30-44: 23% (Statista)
- 45-64: 19% (Statista)
- 65+: 9% (Statista)
- Recommended rent burden (amount spent on rent compared to total income): 30%. (Census)
- Millennials will spend $93,000 (45% of income) on rent by age 30. (RENTCafé)
- Gen Z are expected to spend $100,000 on rent by age 30, almost half their expected income. (RENTCafé)
- Gen X rent burden: 41%(RENTCafé)
- Baby Boomer rent burden: 36%(RENTCafé)
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