The Housing Crisis: How Young Americans Are Sacrificing Essentials to Keep a Roof Over Their Heads
In a revealing snapshot of America’s housing crisis, two in five young renters and homeowners are now cutting back on dining out just to afford their monthly housing expenses. This seemingly small sacrifice is just the tip of the iceberg in a troubling pattern of compromises that Gen Z and millennial Americans are making to keep up with soaring housing costs. Beyond skipping restaurant meals, many young people report more extreme measures—from working multiple jobs to foregoing medical care and even skipping meals altogether. These aren’t lifestyle choices but necessary adaptations to an increasingly unaffordable housing market that’s forcing young Americans to choose between basic necessities.
The numbers paint a stark picture of generational inequality in housing affordability. While home prices have surged by more than 40 percent since 2018, wages have only increased by 28 percent during the same period. Rental costs haven’t provided much relief either, with median asking rents climbing approximately 22 percent. Add to this the doubling of mortgage rates during the pandemic—now hovering stubbornly around 7 percent—plus increases in property taxes, HOA fees, and insurance premiums, and the result is a perfect storm of unaffordability. The impact is dramatically uneven across generations: 70 percent of Gen Z and millennial renters struggle to afford their housing payments, compared to just 52 percent of baby boomer renters. Similarly, 41 percent of young homeowners struggle with mortgage payments, while only 22 percent of baby boomers face the same challenge. Even Gen X hasn’t escaped unscathed, with many still bearing the financial scars of the 2008 financial crisis.
For years, younger generations have faced dismissive commentary suggesting their housing challenges stem from frivolous spending on luxuries like “avocado toast.” This criticism has always missed the mark by focusing on individual spending habits rather than addressing systemic economic issues. Ironically, young people are now actually cutting back on these small pleasures—not by choice, but out of necessity. According to Redfin’s survey, about 40 percent of young renters and 43 percent of young homeowners have reduced restaurant outings to afford housing costs. More alarmingly, 22 percent of young renters report skipping meals entirely. This trend extends beyond the youngest generations, with similar percentages of Gen X and baby boomer homeowners also reducing restaurant visits. The impact is being felt throughout the economy, with Americans consuming one billion fewer restaurant meals in the first quarter of this year compared to the previous year, according to market research firm Circana.
The sacrifices extend far beyond dining habits. Young renters and homeowners are foregoing vacations, with 31 percent of young renters and 36 percent of young homeowners taking fewer trips or none at all. Perhaps most concerning is that 19 percent of young renters and 13 percent of young homeowners report delaying or skipping healthcare and medical treatments to afford housing. Many are turning to additional income sources, with approximately one in six young renters working extra jobs, and similar numbers engaging in side hustles like food delivery or rideshare driving. About a quarter of both young renters and homeowners are putting in additional hours at their existing jobs. The housing crisis has even reversed the traditional path to independence, with 12 percent of young renters moving back in with parents and another 10 percent moving in with other family members—often to save enough for a home purchase.
The “bank of mom and dad” has become a crucial financial institution in this housing crisis, creating a widening gap between those with family wealth and those without. Approximately 27 percent of young renters and 14 percent of young homeowners report borrowing money from friends and family to make housing payments, while 20 percent of renters and 17 percent of homeowners receive financial gifts that aren’t expected to be repaid. As Redfin’s chief economist Daryl Fairweather notes, “Many Gen Zers and millennials are making real sacrifices—picking up side gigs, selling their possessions, even delaying doctor’s appointments—just to pay for the basic need of housing.” She points out that roughly one-quarter of young recent homebuyers used family money for their down payments, highlighting how access to family wealth is becoming an increasingly critical factor in determining who can achieve homeownership.
This housing affordability crisis threatens to exacerbate wealth inequality for generations to come. When young Americans must choose between healthcare and housing, or work multiple jobs just to afford basic shelter, we’re witnessing more than an economic challenge—it’s a societal one. The situation raises profound questions about the future of the American Dream and whether homeownership will remain accessible to those without family wealth. As inflation persists at 2.7 percent and job growth slows, American households continue tightening their belts, with housing costs consuming an ever-larger portion of their budgets. The crisis demonstrates that housing affordability isn’t just about individual choices or spending habits but reflects deeper structural economic issues that disproportionately burden younger generations. Without meaningful policy interventions addressing both housing supply and affordability, the gap between those who can comfortably afford housing and those who struggle may continue to widen, reshaping American society in the process.
