The average millennial will spend over $200,000 on rent before buying a house — but Gen Z will spend even more
- Generation Z renters will spend more money on rent before they buy a home than any previous generation, according to a report from HotPads.
- Gen Z will spend an average of 11 years renting before becoming a homeowner, one year less than millennials.
- The top four cities where Gen Z renters are projected to spend the most money on rent are all in California.
It's no surprise that rent is more expensive for millennials than it was for baby boomers.
Even when adjusted for inflation, today's youngest adults will spend more on rent in their lifetime than their predecessors, according to the report. Members of Gen Z will spend an average of $226,000 on rent before ever owning a home.
That tops older generations, surpassing the $202,000 millennials will end up spending on rent, and the average $148,900 baby boomers spent on rent before becoming homeowners after adjusting for inflation.
But while Gen Z will spend more money on rent in their lifetime — paying a median of $1,710 a month — HotPads estimates the younger generation will be quicker to buy homes than millennials. Baby boomers spent an average of 10 years renting before buying, Gen Z will spend 11 years, and millennials will spend 12 years renting.
"While there are a lot of unknowns about how the American economy will evolve over the coming decades as Generation Z grows into adulthood, if historical trends hold, the long-term forecast right now suggests that Generation Z is likely to benefit from a stronger job market than millennials," said HotPads economist Joshua Clark.
Clark also said that "while rising rents and home values mean that it won't be as easy for Generation Z to become homeowners as it was for baby boomers, they should get there sooner than millennials did."
HotPads analyzed government data and its own rental data to determine how much total rent each generation paid or will pay in their lifetime before becoming homeowners, as well as how many years they spent or will spend renting. HotPads based their projections on data for the average person in the median birth year of each generation — 1954 for baby boomers, 1987 for millennials, and 2002 for Gen Z. They also assumed renters begin paying rent at age 20.
Below, see the 10 cities expected to be most expensive for Gen Z renters, plus how much the average millennial and baby boomer renter spent or will spend there before buying a home.
More from Business Insider:
Nobody wants to buy 'Versailles in Manhattan,' a $19.75 million Upper East Side townhouse that has been on and off the market for 15 years
7 ways life is more expensive today for American millennials than previous generations
What a $500,000 home looks like in 25 major cities across America