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February 08, 2023 at 01:24 PM
Related: 15 Best U.S. Cities to Invest in Rental Property: 2022
Renting a home rather than buying one is a growing trend in the U.S., with 43 million families currently living in apartments, the highest level in 50 years, according to a new report from RentCafe, an apartment search website.
Renting is popular even among people with high incomes who can afford to buy a home. The report noted that the number of renters with annual incomes of $150,000 or more grew by 82% between 2015 and 2020 to 2.6 million, citing the latest data from Integrated Public Use Microdata Series. That was way ahead of the 3.2% increase in the number of renters overall during the same period.
Why do high earners turn to renting? According to RentCafe, one reason may be high home prices that make homeownership less attractive, especially for well-off residents in pricey locations.
The website’s analysis compared home prices to renter income in the cities with the biggest increases in high-income renters: In nine of the 10 cities where the number of top-earning renters increased considerably, growth in home prices was higher than the 29% national average.
Among the high-earning families living in rentals in the U.S. are 3,381 households with a total annual income of more than $1 million, triple the number in 2015, according to the report. Millionaire renters live mainly on the East Coast and West Coast:
- New York: 2,457 in 2020, up 171% from 2015
- San Francisco: 294, up 1,629%
- Los Angeles: 143, up 361%
- Washington: 121, up 195%
- Jersey City, New Jersey: 104; no data for 2015
For its study, RentCafe researchers looked at IPUMS data for five-year estimates of the number of millionaire renter households between 2015 and 2020 across 100 U.S. cities, and to U.S. Census data for the number of renter households with an annual income greater than $150,000.
See the gallery for the 15 U.S. cities with the biggest increases in high-earning renters between 2015 and 2020.
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