Rent affordability for Gen Z is more challenging in five major U.S. cities compared to millennials at the same age.

Many young professionals struggle with balancing their expenses and income.

Recent research from Zillow reveals that 3 out of 5 Gen Z renters, born between 1997 and 2012, spend over 30% of their income on rent.

The number of Gen Z renters who paid more than a third of their income to housing in 2022 was slightly lower than the number of millennials who were rent-burdened in 2012.

In some cities, a decade ago, researchers discovered an increase in rent-burdened young people. According to Zillow economist Kenny Lee, this financial trend is concerning for early career workers in those areas.

"According to Lee, young renters face a significant challenge due to high rent burdens. This financial strain can hinder their ability to meet other essential expenses and save for future goals."

According to Zillow, more Gen Z members are experiencing rent burdens in the top five cities than millennials did 10 years ago.

1. Houston

• Gen Z median gross annual income in Houston (2022): $38,457
• Gen Z median monthly gross rent in Houston (2022): $1,225
• Percentage of rent-burdened Gen Zers in Houston (2022): 66%
• Percentage of rent-burdened millennials in Houston (2012): 54%

2. San Antonio

• The median annual income for Gen Z in San Antonio (2022) is $37,100.
• The median monthly gross rent for Gen Z in San Antonio (2022) is $1,215.
• Percentage of rent-burdened Gen Zers in San Antonio (2022): 66%
• Percentage of rent-burdened millennials in San Antonio (2012): 59%

3. Denver

• Gen Z median gross annual income in Denver (2022): $60,000
• Gen Z median monthly gross rent in Denver (2022): $1,730
• Percentage of rent-burdened Gen Zers in Denver (2022): 61%
• Percentage of rent-burdened millennials in Denver (2012): 55%

4. San Diego

• The median annual income for Gen Z in San Diego in 2022 is $55,000.
• The median monthly gross rent for Gen Z in San Diego (2022) is $2,148.
• Percentage of rent-burdened Gen Zers in San Diego (2022): 73%
• Percentage of rent-burdened millennials in San Diego (2012): 67%

5. Minneapolis

• Gen Z median gross annual income in Minneapolis (2022): $42,090
• Gen Z median monthly gross rent in Minneapolis (2022): $1,370
• Percentage of rent-burdened Gen Zers in Minneapolis (2022): 62%
• In 2012, the percentage of rent-burdened millennials in Minneapolis was 56%.

Researchers from Zillow gathered rental price and income data from the 30 largest metropolitan areas in the U.S. Interestingly, cities known for their high cost of living, such as New York, Los Angeles, and San Francisco, are not among the most challenging cities for Gen Z renters.

The Covid-19 pandemic has led to an increase in demand for new housing among professionals leaving big cities for suburbs with more space, resulting in rising rents for young people in those areas.

According to Lee, the housing market couldn't keep up with the demand due to decades-long undersupply of housing.

Recently, there has been a glimmer of hope for Gen Z renters seeking more affordable rental prices, according to Lee.

Earn more money at work by taking CNBC's online course on negotiating a higher salary. Expert instructors will teach you the necessary skills to increase your paycheck, including how to prepare, build confidence, communicate effectively, and craft a counteroffer. Start now and use the coupon code EARLYBIRD for a 50% discount through November 26, 2024.

Sign up for CNBC Make It's newsletter to receive expert advice on work, money, and life.