Still Think There’s No Inflation? Check Out All The Affluent Renters
Generally speaking, if you can afford to buy a decent house you do it. Owning is viewed by most people to be both simpler (no worries about your landlord selling a rental out from under you) and a better financial deal. And of course there’s the status of home ownership. When you rent, people wonder why you can’t afford to buy. When you own, they view you as a higher class of neighbor.
Yet a growing number of affluent Americans are now renting. From today’s Wall Street Journal:
So You Make $100,000? It Still Might Not Be Enough to Buy a Home
DENVER—For Janessa White, the American dream of a red brick house on a tree-lined street blocks from a good elementary school remains obtainable. She just has to rent it.
Ms. White and her boyfriend moved with her 7-year-old son from Missouri to Denver last year. In Missouri, Ms. White owned her home, which she bought for a little over $100,000. To buy a house like the one she rents in Stapleton, an affluent section of the Colorado capital, would cost about four times as much. Even though her household’s income is in the low six-figures, homeownership is daunting in Denver.
“It’s hard not to want to buy,” she said. “Saving for a huge down payment seems almost impossible.”
Ms. White’s household is part of a growing camp: high-earning Americans who are renting instead of buying homes. In 2019, about 19% of U.S. households with six-figure incomes rented their homes, up from about 12% in 2006, according to a Wall Street Journal analysis of Census Bureau data that adjusted the incomes for inflation. The increase equates to about 3.4 million new renters who would have likely been homeowners a generation ago.
“I can’t think of anyone we’ve rented to recently who didn’t make $100,000,” said Bruce McNeilage, who owns 148 rental homes around the Southeast and is building 118 more.
It isn’t unusual for high-earners to rent in pricey coastal cities like New York and San Francisco, where sky-high real-estate prices have long limited homeownership. Yet these markets account for less than 20% of the new six-figure renters, according to the Journal’s analysis.