Millionaire Renters Have Tripled Since 2015
Abstract
Many Americans choose to rent, not because they can't afford to buy a home, but because they find renting to be advantageous. A newly published report from RentCafe.com about high earners and millionaire renters indicates that the American household is changing as homeownership is not a priority for everyone, especially not for Millennials and Gen Zs. With 43 million families living in apartments, the highest level in half a century, renting is popular even among high earners who are able to buy, but prefer to rent their home instead. In fact, the most recent analysis of IPUMS data shows that the number of renters with annual incomes of over $150,000 grew by 82% between 2015 and 2020, faster than renters overall, who inched up by 3.2% during the same time frame. High-income renters earning $150,000 or more saw rapid growth of 82% in five years - the most significant increase among all income groups - followed by renter households with annual incomes between $100,000 and $150,000. This becomes even more obvious when comparing home prices to renter income in the cities with the highest increases in high-income renters: In nine of the 10 cities where the number of top-earning renters leapfrogged considerably, growth in home prices was higher than the national average An even more interesting phenomenon of the past few years is the rise of an unlikely new kind of tenant - the millionaire renter. The number of renter households with incomes of more than $1 million reached a record high of 3,381 in 2020 - three times as many as there were in 2015, when 1,068 millionaires were renting their homes in the U.S., according to the most recent data from IPUMS. While home prices could be considered an obstacle even for high-income renters, what stops some millionaires from stepping on the homeownership ladder? It might be an issue of comfort and smart investing. Gen X follows closely behind, making up 23% of millionaire renter homes. Millionaire renters in Washington, D.C. have the largest homes.
