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, our 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. There are now 2.6 million high-earners living in rentals in the U.S. and among them is a new ritzy kind of tenant: millionaire renters.
Here are the main highlights:
- Amid a spike of 75% in wealthy-renters, Scottsdale is home now to the second biggest rich-renter community in Arizona, with 5,302 residents. In addition, rich renters represent 13% of the city’s total renter population.
- Although Scottsdale is a magnet for affluent renters, it is not a preferred destination for millionaire renters. Instead, those who make more than $1,000,000 per year opt instead for major urban areas such as New York, San Francisco and Los Angeles.
- What is the situation in the Phoenix-Mesa-Chandler metro? Phoenix takes the lead when it comes to the most populous high-earner renter community in Arizona due to a 122% increase since 2015. However, in the suburbs, Surprise has seen the biggest leap in high-income renters (336%). Meanwhile Chandler and Glendale more than doubled the number of wealthy renters in the past 5 years.
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. At the same time, middle-income renters grew at a slower pace, but still posted double-digit increases. The only segment to register a drop was that of households earning less than $50,000, which decreased by 11.2%. This is explained by low-income renters moving in with family members when the pandemic started, as well as households whose earnings grew and transitioned to higher income groups.
About Real Estate Intelligent Marketing (REIM):
REI Marketing is an innovative Real Estate Marketing Company that offers distinctive real estate services to developers and multifamily investors. We are a vibrant, dedicated team of industry professionals with international experience in marketing and multifamily investment.