As high prices and high mortgage rates sideline some buyers from the housing market, more high-earning tenants in New York City are deciding homebuying is not worth the hassle.
New York is the hottest rental spot for millionaires, according to a report from RentCafe. There were nearly 2,500 millionaire rental households in the Big Apple in 2020, trouncing other cities by leaps and bounds, including San Francisco in second place with less than 300).
The report analyzed census and survey data from Integrated Public Use Microdata Series from 2015 through 2020 to study rental trends across the nation.
New York City’s rental households accounted for roughly 75 percent of the national total. The amount of millionaire rental households grew by 171 percent from 2015. Other cities to see big spikes in the category over those five years include Los Angeles, San Francisco and Jersey City.
The city also claimed the top spot for number of high-income rental households — defined as those who earn at least $150,000 — with more than 296,000 high-income renters in 2020, more than triple second place Los Angeles.
They only made up 14 percent of the city’s renter population, nowhere near San Francisco’s leading share of 35.6 percent.
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High prices are one factor deterring the wealthy from buying homes, but the report said renters are often following a desire to avoid costly home maintenance and enjoy the increased flexibility that comes with renting instead of buying. There’s also a generational divide.
“For many millennials of homebuying age and with above-average incomes, lifestyle renting is a better choice than owning,” the report stated.
Because New York already had so many high-income renters, the city didn’t rank for growth in recent years. Seattle saw the biggest rise, where high-income renters increased by 169 percent from 2015 to 2020. Miami trailed closely behind at 166 percent. Both markets had home prices grow by at least 53 percent in that period.
Overall, there were 2.6 million high-income renters across the country in 2020. There were nearly 3,400 millionaire rental households, more than triple the level in 2015.