Texas is the top destination for Gen Zers in the United States, beating out California and Florida, but a recent report indicates that climbing rent costs will force such residents to spend $149,000 on housing by age 30.
RentCafe compared housing costs using historical data between Millennials and Gen Zers to see how much more the younger generation will pay from 22 to 29 years old. Dallas is the second-most costly metro the study looked at in Texas, behind Austin at $160,000.
One of the reasons behind spiking rental costs is the influx of Gen Zers into the region, which has put additional pressure on an already tight housing market.
“In 2022, Texas boasted an impressive net migration of 76,805 Generation Z individuals,” the Texas Association of Businesses wrote. “With four of the nation’s ten largest cities and a diversified economy, Texas offers a vast array of job opportunities catering to diverse talents and backgrounds — a driving force behind the state’s overall population boom.”
While the rental costs for Gen Zers are high in Dallas, home ownership is an even bigger challenge. RentCafe looked at the cost of home ownership and found that owning in Dallas would cost $203,433 over the same 22 to 29-year-old period. Dallas is still less expensive than Austin in terms of home ownership.
The data that RentCafe used came from 2022 before Texas voters approved a significant cut to property taxes in November 2023, as previously reported by The Dallas Express. Voters approved a property tax cut of $18 billion that will help provide relief for homeowners, particularly younger buyers.
“Fighting for property tax reform is something Lt. Governor Dan Patrick and I have been doing together for almost 20 years in the making,” the bill’s author, Sen. Paul Bettencourt (R-Houston), said in an emailed statement to The Texas Tribune. “To have all of everyone’s hard work pay off, it’s fantastic to see the public finally getting the property tax reduction they have always wanted and deserved. It’s great to give people their money back from excess budget collections.”
Eight of the 10 most expensive locations in the United States for rental costs are coastal urban metros. San Jose, California, topped the list with an eight-year cost-to-rent of $296,000 and a cost-to-own of nearly $467,000. Other notable cities topping the list include San Francisco, California; Honolulu, Hawaii; Boston, Massachusetts; New York City, New York; and Los Angeles, California.
The study identified that wages are higher for Gen Zers than Millennials, even as the difference between rental and homeownership costs is higher for the younger generation over the same eight years. Changes in Texas to property taxes and a focus on attracting businesses ranging from shipping to technology indicate that the future for both generations will run through Texas.
