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The surprising reason why renting is on the rise

Report finds high-income Americans are behind homeownership decline

The Eugene at 435 West 31st Street
The Eugene at 435 West 31st Street

The rise of rental housing has been one of the biggest trends in the post-2008 U.S. real estate market. But it isn’t all about falling incomes and unattainable mortgages.

Wealthy and well-educated Americans in large metropolitan areas are increasingly keen to rent, according to a new report by NYU’s Furman Center. Among households with more than 120 percent of area median income, the share of renters grew by 1.2 percentage points between 2012 and 2015, while it fell by 0.2 points among households making less than 50 percent.

The share of renters among well-educated households also grew more quickly than among their less educated peers, the report noted.

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Renting households are still far more likely to be poor than homeowners: 41.6 percent of renters earned less than 50 percent of AMI in 2015, compared to 15.7 of home-owning households, the report found. A mere 21.4 percent of renters earned more than 120 percent of AMI, compared to 53 percent of home-owning households.

The report is based on data from the American Communities Survey and covers 53 metropolitan areas with 1 million inhabitants or more.

Large institutions like the Blackstone Group increased their multifamily investments since the financial crisis, pointing to growing demand from young Americans.