Real Estate Agent Worries That the Next Gen Will Not Be Able to Retire as House Rents Skyrocket

We are often told that the 20s are for hustling before you settle and slow down slightly in your 30s. However, many people who are already in their 30s are failing to afford the lifestyle they thought would. Adults in their 30s are failing to manage their finances and owning a home has become a distant dream for many. A real estate agent from Orlando Freddie Smith took to TikTok to express his concern about the current scenario. "My biggest concern with our country turning into a renters’ economy is: how will the millennials and Gen Zers retire comfortably if they don’t own a house and are going to have to rent forever?" he said in a recent TikTok. 

Smith also wonders if the next generation will be able to retire at all. He goes on to explain the math in the video and shows how it simply "doesn't add up." According to the Federal Reserve, the median price of a home in the U.S. is around $400,000 in 2024 and Americans simply cannot afford that these days, as per Smith. He says that at this point Americans need to be prepared to pay $80,000 to hit the recommended 20% down payment. According to the Bureau of Labor Statistics, the median yearly earnings for 25- to 34-year-olds is $56,160, which means that setting aside that amount is very hard for most young Americans. 

This is why most Americans resort to renting homes. As per Smith, renters pay an average of $1,950 per month. Then, Smith talks about what would happen if the home prices and rent continue to rise at this pace. Smith shows the rent prices will be 4.3 times higher in 2024 compared to 1994 ($1,950 per month in 2024 compared to $450 per month in 1994) and assumes that even after three decades, the rent will be increasing at the same rate that it is today. At this rate, the mean rent all over the country would be around $8,500. While the numbers are steep, Smith says that it's not long before we get to see this price as rents are already well over $4,000 in New York.

This is where Smith gets worried. "How do you retire if your rent’s going to be $8,500?” Smith asks. There is no denying the fact that being able to retire has become a luxury that only a few can afford in the US. Smith also talks about how many people who had bought their homes back in 1994 have been able to sell their homes at three times the original price. Smith then points out how the younger generation will not be able to do that as they are failing to reach the kind of financial freedom needed to buy a home early in their lives. 

"This is a major concern," he says. "How can you give the millennials and Gen Z and Gen Alpha hope about the future? Lastly, Smith talks a bit about what needs to change. He places a bit of blame on institutional investors like hedge funds and says that there need to be "systems" put in place to help Americans with their retirement plans. 

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