Estimated read time: 3-4 minutes
- More wealthy Americans are choosing to rent over buying homes, says Redfin.
- Raleigh and Orlando lead the trend, with significant increases in wealthy renters.
- Flexibility and economic factors drive this choice, despite high home costs.
SALT LAKE CITY — More wealthy Americans have been choosing renting over home buying.
In 35 of the 50 most populous U.S. metropolitan areas, including Salt Lake, well-off renters account for an increasing share of the rental market in recent years, according to a new analysis by the nation's largest brokerage website, Seattle-based Redfin.
It's "The Rise of the Rich Renter," Redfin says in a Tuesday post that begins, "The new status symbol? A lease. More wealthy Americans are skipping homeownership and renting instead — especially in Sun Belt cities that exploded in popularity during the pandemic."
Leading the trend is Raleigh, North Carolina, and Orlando, Florida.
The largest increase came in Raleigh, where 7.7% of renters in 2023, the most recent data available, were considered wealthy because their household income ranks in the top 20% locally. In 2019, only 4.8% of Raleigh renters hit that mark.
Orlando posted the next-highest increase in wealthy renters at 10.8% from 8.5% in 2019; followed by Buffalo, New York., at 6.6% from 4.6%; Tampa, Florida, at 9.4% from 7.9%; and San Diego, California, at 9.3% from 8%.
It's not high home costs that cause people who could afford to buy to rent instead, Orlando real estate agent Juan Castro explained in the Redfin post.
"For a lot of folks, renting is all about opportunity. The U.S. economy and job market are in flux, and people want to be able to move and flow as things change," Castro said, adding he has friends who have sold their home in favor of renting.
"They want the flexibility to move fast if their dream job surfaces in another state," he said. "They believe many employers won't offer remote work moving forward, and don't want to be stuck with a home that may be difficult to sell quickly."
Which areas have the highest share of affluent renters? San Jose, California, tops that list among the nation's top 50 most populous metro areas with 11%, followed by Orlando with 10.8%, San Francisco with 10.4%, New York with 10.3% and Seattle, with 9.9%.
Redfin pointed out renting can be much more affordable than buying.
That's true in San Jose, where the median home price is $1.4 million. There, a wealthy resident would need to spend only 10.5% of their income to rent a median-priced apartment but it would take twice that to buy a median-price house.
Oklahoma City had the lowest share of well-off renters with 4.7%, followed by Cincinnati with 4.8%; Hartford, Connecticut, with 5%; Cleveland with 5.1% and Providence, Rhode Island, with 5.2%, all areas Redfin said have low home buying costs.
In the Salt Lake metropolitan area, 6.7% of renters are in the top 20% of earners who make at least $167,827, an increase of just 0.3 percentage points between 2019 and 2023. During that time, the median rent increased 40.7% compared to a 48.6% jump in the median home price.
Last month, Redfin reported the median asking rent in the Salt Lake area declined in January to $1,476, a 6.5% drop from what landlords were seeking in January 2024. Only Austin, Texas, and Tampa, Florida, had larger declines, according to Redfin .
Redfin's analysis of wealthy renters is based on data from the U.S. Census Bureau, Multiple Listing Service sale information and county records from 2019-2023, the most recent year for which income data is available.
