$726 Million in Rent on the Line as Gen Zers Move in With Parents
Younger generations are moving back in with their parents amidst the coronavirus crisis. What does that mean for the rentals they're leaving behind? According to new data from Zillow, $726 million in rent is on the line, and that's only counting Gen-Z renters.
According to Zillow, 2.7 million adults moved back in with their parents during the months of March and April, likely due to job losses as a result of the pandemic. In April alone, there were 32 million adults living with their parents or grandparents—a record high.
What if these moves are permanent? As 80 percent of those who moved back in with their parents are Gen Zers, that means 1.4 percent of the total rental market could be at risk.
"The share of adults living with their parents has been high since the global financial crisis of the aughts," said Zillow Senior Principal Economist Skylar Olsen. "Then, it was millennials flocking to the basements and spare bedrooms of their baby boomer parents, where many remained as rent burdens grew. Now, it's Gen Z's turn to ride out today's crisis amid massive unemployment. But this time, rents are more likely to slow, easing the path to returning to living on their own even if some under-employment persists. Apartment construction has exceeded historic norms in recent years, and some are likely to double up or live more affordably in all kinds of ways, which should soften rent growth, at least for now."
The most at-risk areas are metros in which a large population of renters are Gen Zers; that means Austin, Kansas City, Cincinnati and Pittsburgh. Other areas with a bigger population of millennial or older renters have less to worry about. These markets include Miami, New York and Los Angeles.