Growing number of millionaires opt for renting over buying homes: Report
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Add a small number of millionaires to the ever-growing list of Americans who have delayed – or disregarded– homeownership.
A Wall Street Journal report released Monday highlighted the surprising uptick in millionaires opting to rent instead of owning their homes despite their ability to afford pricier properties.
Millionaire entrepreneur George Goognin, who says value doesn't match price in today's market, is on that list.
"In terms of price for value, the supply is close to zero," he told the outlet.
NEARLY HALF OF RENTERS SPEND MORE THAN 30% OF INCOME ON HOUSING, CENSUS BUREAU FINDS
A FOR RENT sign is displayed outside a house in the area of St Clair Ave. E. and Mt. Pleasant Rd. in Toronto. (Lance McMillan/Toronto Star via Getty Images / Getty Images)
Instead, he opts for renting a high-rise apartment in Manhattan for $19,000 a month.
Bloomberg covered something similar last year, documenting the dramatic cost increase of properties in select Jersey City neighborhoods that once saw affluent ownership when average prices were lower.
That was 2015, however.
"Five years later, though, 104 millionaires were renting their homes in Jersey City, according to an analysis of US Census Bureau data by the rental marketing software company RentCafe. And not just in New Jersey: In Washington, D.C., the number of millionaire renters tripled over this five-year span, from 41 to 121. For San Francisco, this figure shot up an astonishing 1,629%," the report reads in part, adding that the overall number still isn't "huge."
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A "Home for Sale" sign in the Capitol Hill neighborhood of Washington, D.C., US, on Tuesday, July 30, 2024. Rent is more affordable in all 50 states compared to buying a home, according to personal finance company Bankrate. (Tierney L. Cross/Bloomber
The same report indicated the number of larger-income households – or households earning over $150,000, doubled between 2015 and 2020.
The numbers continue to grow.
Data analyzed by the Wall Street Journal indicated a 10.5% rise in renters among those pulling in $750,000 or more in annual income between 2018 and 2022, and those whose net worth ranked in the top 5% saw a 3.7% increase in renters.
One millionaire couple who previously owned a home told CNBC they prefer renting because it allows them to "outsource" their repairs to their property manager, enjoy a walkable environment and spend less time doing chores after downsizing.
However, the trend isn't happening everywhere.
"As an agent with 41 years of experience in real estate, I do not see this trend in the Houston area. I do know of some high-end earners who do rent," Cyndi DePalermo, a Texas-based real estate agent, told Fox News Digital on Tuesday.
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"I would describe these folks as people who travel a lot and prefer not to have to maintain a residence. I also think, especially in the city, if you choose to rent, you can be closer to high-end amenities that, if you bought, could be a great distance away or not available," she added.
Renters have finances on their side across all major U.S. cities, according to a study by personal finance company Bankrate.
"Nationwide, the typical home costs nearly 37 percent more to buy than to rent on a monthly basis. Rent increases have softened across the U.S. over the last year, and the combination of high home prices, elevated mortgage rates and low housing inventory creates a strong headwind for aspiring homeowners," the outlet wrote in April.
When asked about the uptick in high income renters, Mark Hamrick, senior economic analyst at Bankrate, told Fox News Digital the following: "For those with real wealth, most will choose to buy homes because they don’t face the same kind of affordability challenges that less fortunate individuals are dealing with. A smaller cohort can certainly make the argument that flexibility associated with renting is most attractive."
"While homeownership is the primary path toward wealth creation in the U.S., those who are already wealthy may choose to allocate their funds elsewhere. It is absolutely true that most Americans associate homeownership with the American Dream. Close behind, based on our Bankrate survey, are the ability to retire and having a successful career. The wealthy have the luxury of viewing these options through different prisms."