Even though millionaires have more options than average American buyers, many see renting as a better investment for now.
NEW YORK – Across the United States, the number of millionaire renters is increasing because, they say, the high-quality, reasonably priced homes are hard to find.
According to census data analyzed by The Wall Street Journal, the share of households with annual incomes of more than $750,000 that rented between 2018 and 2022 rose to 10.5%, marking the highest level since the mid-2000s.
In the previous five-year period, the number of renters at that annual income level was 8.4%. The share of households with net worth ranking in the top 5% who rent reached 3.7% in 2022, according to the Federal Reserve’s Survey of Consumer Finances.
Housing supply has increased in recent months, but inventories are not near pre-pandemic levels. The lack of inventory has pushed up house prices to record highs. A recent Bankrate study found that it is cheaper to rent than to buy in all top 50 metro areas. Even though millionaires have more options than average American home buyers, the math of buying a home compared to renting one doesn’t add up to a good investment for them.
The costs of buying and owning a home is higher, and some millionaires would rather invest in the stock market or elsewhere to grow their wealth. Some millionaires also prefer the flexibility and convenience of renting where maintenance is taken care of by someone else. Others prefer the luxury amenities in the rental market from gyms to larger floor plans.
Source: Wall Street Journal (09/16/24) Heeb, Gina; Overberg, Paul
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