ARIZONA REAL ESTATE & HOUSING NEWS
Valley sees spike in number of millionaires choosing to rent rather than buy homes
How well do you know your neighbors? If you live in metro Phoenix, there's a growing chance they could be millionaire renters.
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PHOENIX — How well do you know your neighbors? If you live in metro Phoenix, there’s a growing chance they could be millionaire renters.
Valley households earning $1 million or more per year are increasingly choosing to rent rather than buy homes, according to a recent report from RentCafe.
The report, which analyzed data from IPUMS — a public database from the University of Minnesota — shows that from 2019 to 2023, the number of Phoenix-area renter households with seven-figure incomes increased by 519%. That’s compared to a 347% increase for million-dollar earners who chose to buy homes.
In fact, the Valley ranked sixth nationally on the list of major metros for trending millionaire renters, per RentCafe. Houston holds the top spot.
Why do millionaire renters opt not to buy homes?
Doug Ressler, manager of business intelligence at Yardi Matrix, said supply shortages and relatively high home prices have made more people hesitant to enter the housing market.
Ressler said home prices are growing faster than wages, changing the historical standard of what’s affordable.
“It should be about 3 to 1, so a family making $100,000 a year should be able to afford a $300,000 home. Well, today, that ratio has increased,” he said.
He said in some areas around the country, median home values are upwards of nine times the median household income.
“A short way of saying it is, a million dollars doesn’t buy you much anymore because the rules have changed,” he said.
The median sale price of a home in Arizona was $453,000 in May, according to Redfin.
Meanwhile, the annual median household income in Arizona was just under $77,000 in 2023, according to the most recent U.S. Census Bureau data.
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Comments
4 Comments
The story doesn’t have much to do with the headline, being focused on overall housing affordability rather than the circumstance of rich people choosing to rent.
The taxpayer with an income over a million per gets an average $90,000 per year income tax cut as soon as President Trump signs the reverse Robin Hood law that is about to go through. (Cbpp dot org, June 17).
That’s $7,500 after-tax dollars per month. A quick check of rental listings in Scottsdale shows that the Republicans have solved the homelessness problem for million- dollar earners very neatly.
So if they pay others to do the work they can't, be it through rent or by hiring an outside service, how is that socialism? That sounds more like capitalism and free enterprise.
The only people that say "your house is your biggest investment" are the ones trying to sell you the overpriced, oversized house. Renting is how you become a millionaire. It allows you to take new jobs and follow the money and allows you to invest your free cash rather than tying it up in an asset that needs continual influxes of cash just to maintain its value.