CURATED READS FOR GEN Z—AND THEIR Z-CURIOUS COLLEAGUES

first up

In 2019, a study estimated that a Gen Zer in the United States would spend a whopping $226,000 on rent in their lifetime—and that was before the gut punch of recent rent hikes.

The main culprit: soaring inflation (a 40-year high) that can cripple entry-level workers living on entry-level pay. 

Inflation means dollars don’t stretch as far, and the same apartments are being rented for much more money, especially in urban areas. In June, average rent in London was £1,846 ($2,104), and Manhattan saw an all-time record of $5,058. 

Want a refresher on inflation? You’re up to date but want to dive deeper? Check out our McKinsey Explainers—curated quick reads on big topics, backed by our insights. Read a sample Explainer on inflation on desktop and mobile here, and download the McKinsey Insights app to access them all—with topics like decarbonization, Web3, the metaverse, and more—for free. 

Prices like those have meant Gen Z has had to get creative, finding more roommates (including total strangers, for better or worse) or moving out of city centers.   

In the United States, Gen Z has made headlines for choosing to live at home with their parents rather than strike out on their own—29 percent of under-25s in one survey. And one-third is spending half their monthly income on rent. Though living with parents as a young adult is much more common elsewhere in the world, inflation is hitting across the board:   

These rising rents only make the existing affordable-housing crises in many urban areas worse—the United States has lost thousands of naturally occurring affordable housing complexes in recent years, and is poised to lose more.  

Gen Z is getting creative with paying rent—my strangers-turned-roommates worked out fine—but something needs to give. It’s not a good sign when House of the Dragon sounds like an almost-tenable roommate situation. 

VISUALIZE IT

As rent, gas, and grocery prices skyrocket, many consumers have the perception that it’s the same across all products. In fact, many goods—electronics, makeup, toys, and more—have only seen small bumps, write McKinsey senior partner Kelsey Robinson and coauthors.

Wait, don’t scroll 

The wheels on the minimobile… Bikes, mopeds, and e-scooters are already part of the increasing micromobility market. Up next: three- and four-wheeled seated vehicles that fit one to two people. Would you drive one? 

How much is a brick? That depends. The price of steel has increased 60 percent since January 2021, while lumber ($300 per square meter in May 2019) has peaked as high as $1,600 and as low as $500 per square meter only months later. That volatility has big implications.

Make a leap. More than 44 percent of the 280,000 tech professionals in our recent survey started in another industry, and they switch roles much more frequently than the average worker.

NOT US; STILL GREAT

Housing has no age. To beat high prices, Gen Zers are widening housing searches to include cohabitors of different generations. One 25-year-old in Boston is thrilled with her 64-year-old roommate. [Business Insider]

I don’t hate it. In a survey, 84 percent of Gen Z said they’re hoping for a housing crash—it’s the only way they might be able to afford property of their own. [MoneyWise]

A fat purse. Gen Z consumers, who often see shopping as somewhat of a sport, can also view it as an investment. They’re snapping up luxury handbags to sell later—once the bags are discontinued or rare—to beat inflation. [Business of Fashion]

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eight LETTERS: LIKE THE ECONOMY, OR A BALLOON

— Edited by Sarah Skinner, Gen Z curation editor, New York