More Adults Living With Roommates Due To Rental Prices

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More Adults Living With Roommates Due To Rental Prices

As rents across the country rise, the number of working adults living with roommates or parents in order to cut costs and share living expenses has grown rapidly, according to new research.

"As rents have outpaced incomes, living alone is no longer an option for many working-aged adults," Zillow senior economist Aaron Terrazas, said in the release.

 "By sharing a home with roommates -- or in some cases, with adult parents -- working adults are able to afford to live in more desirable neighborhoods without shouldering the full cost alone. But this phenomenon is not limited to expensive cities.

“The share of adults living with roommates has been on the rise in historically more affordable rental markets as well. Unless current dynamics shift and income growth exceeds rent growth for a sustained period of time, this trend is unlikely to change," Terrazas said.

Trends for adults living with roommates

  • Across the country, 30 percent of adults live with either a roommate or parent, up eight percentage points since 2000.
  • Los Angeles, Riverside, Calif. and Miami have the greatest share of adults living with a roommate or parent. These metros also have some of the nation's most expensive rents.
  •  Americans making the national median income should expect to spend about 30 percent of their monthly income on a rental payment, but in Los Angeles, renters spend almost half.

Nationally, nearly one in three adults live with a roommate or parent, the greatest share ever reportedi, according to a new Zillow® analysisii. As rental affordability deteriorates, more U.S. adults may be choosing double up in order to cut costs.

A doubled-up household is where two or more working-agediii adults live together but aren't married or in a relationship — this could mean two millennial roommates or an adult living with parents. The share of doubled-up households has been steadily rising since the late 1990s, when just 23 percent of adults lived together.

The rise in doubled-up households coincides with increasingly unaffordable rental prices nationwide. Americans making the national median income should expect to put about 30 percent of their monthly income toward a rental payment, but in some markets the share is even greater. In Los Angeles, renters spend almost half of their monthly income on rent. In San Francisco, renters spend 42 percent of their income on rent each month.

Metros with the greatest share of adults doubling up also have some of the most expensive rents. In Los Angeles, almost 50 percent of adults live with a roommate or adult parent, the highest share of all markets analyzed. Los Angeles is the third most expensive rental market in the nationiv, with the median rent at $2,720 per monthv.

Riverside, Calif. and Miami metros also have a high percentage of doubled-up households. In Riverside, almost 45 percent of adults are doubled up, along with 41 percent in Miami. Both metros are among the seven most expensive rental markets when ranked by the share of income going toward the typical rent payment.

 Other West metros with a high percentage of adults living with roommates:

  • Seattle – 28.3%
  • Portland – 28.5%
  • Phoenix – 32.2%
  • Denver 27.1
  • Sacramento – 33.1%

When renters decide to move to a new place, a recent rent increase was likely the catalyst, according to the 2017 Zillow Group Consumer Housing Trends Reportvi. Almost 80 percent of renters who moved from a previous rental experienced a rent increase before moving. And when renters start searching for a new place to live, 77 percent indicate that the rental being within their price range is a top requirement.

Renters can’t afford to stay, can’t afford to move

 Homeownership is simply out of reach for many Americans, including many families, according to the Zillow housing trends report.

“In today’s hot housing market, more Americans are renting than at any time in recent history. Forty percent of families with children at home are renters. Renters typically face higher monthly payments than homeowners, and 79 percent of renters who moved in the last year said their rent increased before they moved,” the Zillow report says.

“More than half – 57 percent of renters who moved in the last year -- said a rent increase is the reason they moved. And in order to find their new affordable rental, a quarter (25 percent) of renters had to look beyond the area they initially considered moving. More than a third (37 percent) of renters who have not moved in the past year say they can’t afford to move elsewhere. Nearly half (48 percent) of renters who make less than $25,000 a year say they can’t afford to move,” according to Zillow.

Resources:

Millennials Going Over Budget to Buy Homes in Today’s Hot Market

Share of Adults Living with Roommates Higher than Ever Before

Successfully Living With Roommates

Age 31 and Up, With Roommates. You Got a Problem With That?

House Sharing for Boomer Women Who Would Rather Not Live Alone

 

 

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