The Rise of Millionaire Renters in the US
A new kind of tenant has been on the rise in the US, according to a recent analysis by RentCafe. More than 2.6 million high earners are choosing to rent rather than buy their homes, giving rise to the "millionaire renter". The report reveals that the number of renter households earning over $1 million has tripled since 2015, reaching a record high of 3,381 in 2020.
Historically, cash for a downpayment has been cited as the #1 reason people didn’t pursue homeownership, but we’ve began to see a larger group of individuals in younger generations opt to rent even with more than enough cash available to finance home purchases.
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Who are the millionaire renters?
The analysis shows that millennials make up the largest group of millionaire renters, accounting for 28% of the category, followed by Gen X at 23%. Surprisingly, even though they have the financial resources to own homes, millionaire millennials and Gen Xers are opting to rent instead. The mindset of lifestyle renting has become more popular among the younger generations, and it seems that it's not just a passing trend.
Where are they located?
The millionaire renters are most concentrated on the West and East Coasts, particularly in California, New York, and Washington, D.C. San Francisco saw the biggest uptick in this demographic between 2015 and 2020, with rentals populated by millionaires ticking up by a whopping 1,629%. Los Angeles experienced a 361% increase over the same period.
In addition, the number of renters with annual incomes of over $150,000 grew by 82% nationally between 2015 and 2020, with Seattle, Portland, and Miami leading the pack for this metric.
The RentCafe analysis has revealed some interesting insights into the millionaire renter phenomenon. It seems that for many high earners, lifestyle renting is a better choice than owning a home. This trend has been driven by a combination of factors, including changing attitudes towards homeownership, and the increasing popularity of renting among younger generations. As the number of millionaire renters continues to grow, it will be fascinating to see how the rental market evolves to cater to this new kind of tenant.