Millennial Renter Income Profiles Mirror Market Averages

Young adult apartment renters earn as much as their older neighbors, with those living alone earning significantly higher income than the market average in downtown locations.

Millennials’ Personal Income across Rental Properties

Renting is an expensive proposition. As covered in our previous blogs on housing affordability, households, on average, now spend close to 40% of their total income on gross rents.

Given this context, young adults face significant barriers to entry into the rental market and the independence it affords, resulting in unit sharing becoming the predominant choice in apartment buildings.

As shown below, the personal income of Millennial renters varies across asset class and living arrangement. Those who are able to rent independently earn significantly more than young adults still living in family households¹.

(Please click around for detailed chart information)

This gap is the widest between young adults renting alone and those living with families, with the former group earning close to 65% more across all asset classes.

Living Independently Requires Higher Incomes

At the same time, the data show that Millennials living independently are on par with older renters’ personal income levels in the same living choice category.

This is indicative of a skew in the occupational profile of young renters toward better-paying vocations at the beginning of their careers, which is discussed in a follow-up blog.

As shown below, young adults sharing rental units earn at 96% levels of the segment average (all renters in this category) across small and large asset multifamily.

(Please click around for detailed chart information)

Millennials renting alone, predictably, show higher relative personal income levels. Those in downtown-oriented large apartment buildings, in fact, typically out-earn older renters in this segment, measuring 126% higher income levels than their more elderly peers.

The data also show that renting alone in more widely-dispersed, downtown-adjacent small apartment buildings is more accessible to young adults. On average, these Millennials earn $37,000, or 40%, less than large building single renters.

For market observers, Millennials are going toe-to-toe with the wider market demand, as they continue to shape the supply landscape in their own image. While it’s not surprising that Millennials who are able to rent independently also show higher incomes, the growing magnitude of this phenomenon is significant.

1 All data is sourced from the American Community Survey (ACS), unless otherwise stated. ACS statistics are sample-based estimates of the compositional profile of the total population in the given year of data collection, and include a margin of error.