The average U.S. renter is older, has fewer options and is much more desperate for a big raise than before the pandemic, according to new Zillow data.
Courtesy of NAREE
Zillow Senior Economist Orphe Divounguy at the 59th annual NAREE conference in New Orleans.
The housing affordability crunch has become massive in 2025, said Orphe Divounguy, senior economist at Zillow. Mortgage rates doubled in 2022, now sitting 109% higher than they were in 2019.
“It’s not the $10 frappuccino,” Divounguy said Monday at the National Association of Real Estate Editors’ 59th annual conference in New Orleans, referring to a debunked reason millennials and Generation Zers aren’t able to easily afford houses.
“If you bought a $10 frappuccino every day and you gave up your $10 frappuccino, it would take you about 240 years to get enough money saved up for a down payment in San Francisco,” he added.
The average down payment needed to buy a house in the U.S. is about $70K, though it varies by market. A median-income San Francisco buyer would need to put down about $875K to keep monthly housing costs at 30% of income, Divounguy said.
A median-income household in the U.S. would need an $18K raise over 2019 wages to keep its housing at levels considered affordable, meaning 30% or less of income goes toward housing costs.
“Imagine going up to your boss and saying, ‘Hey, boss, in order to buy my house, I need at least an $18K raise,’” Divounguy said. “This is the median. Then, of course, in some markets, it’s a whole lot higher. And that’s if you can afford the down payment.”
The affordability crisis has been especially hard on would-be homebuyers, meaning that renters are staying renters for longer, Divounguy said. The median age of a renter increased from 36 in 2000 to 42 in 2025, he said.
“Renters are getting older. Renters are starting families,” he said. “They’re doing that [while] renting, as opposed to buying their first home. Of course, that’s a symptom of the housing affordability challenges that we’re facing.”
According to a Zillow survey, 95% of renters said staying within a budget is their top priority, and it’s getting more and more budget-friendly to continue renting.
Before the pandemic, it was $400 cheaper monthly to own a home. Today, after a 10% down payment, it is typically $100 more each month to buy rather than rent a single-family home, Divounguy said.
Rent prices tend to follow home prices, and limited for-sale inventory and unaffordability have contributed to rent growth in the past. This year, Zillow’s economists predict home prices and values will decline.
Home values could finish the year 1.6% lower than in 2024, the first year-over-year drop since 2011, Divounguy said.
This is because builders have constructed more houses than usual over the past two years and more people are selling their homes, creating more inventory.
This could stop or reverse rent growth, though Divounguy said that won’t be as severe as it could have been, as multifamily builders have largely pulled back in recent years.
“The increase in housing inventory actually gives renters more bargaining power, too, and that’s why we think there will be some downward pressure on rents,” he said.