Although they can afford to purchase a home, more well-to-do Americans are choosing to rent instead.
The number of U.S. households earning at least $150,000 annually that chose to rent rather than buy skyrocketed 175 percent between 2007 and 2017, according to an analysis by apartment search website RentCafe, which used data from the Census Bureau to reach its conclusions.
This new breed of renters challenges long-held assumptions that Americans rent a place to live primarily because they can’t afford to buy a home.
“Lifestyle plays an important part in their decision to rent,” study author Alexandra Ciuntu told VOA via email. “Renting in multiple cities at once has its perks, and so does changing one trendy location after another.”
Business and technology hubs like San Francisco and Seattle have the highest numbers of wealthy renters.
“Given the escalating house prices, it seems like a verifiable better decision to go with renting for longer,” Ciuntu said. “Given that in San Francisco, for example, $200,000 buys you just 260 square feet, it’s understandable why top-earners give renting a serious try before deciding whether to invest in a property or not.”
In fact, in both San Francisco and New York, wealthy renters outnumber well-to-do buyers. There are more high-earning renters — 250,000 — in New York City that anywhere else in the country.
“Ten years ago we would have associated real estate equity with life stability, whereas the two are not necessarily interrelated nowadays,” Ciuntu said. “Renting proves to be a more flexible option for those enjoying a dynamic and rich lifestyle. From a more millennial standpoint, this is no longer a brief solution before settling down, but rather an attractive world of possibilities.”
However, this rental enthusiasm doesn’t mean folks in the wealthiest brackets are rejecting homeownership, according to Ciuntu. Between 2007 and 2017, Chicago added 9,800 more wealthy owners than high-income renters, Seattle gained 13,400, and Denver added almost 18,000 more well-to do earners than wealthy renters.