Many Valley millionaires are choosing to rent their homes
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Several hundred millionaires in the Valley are choosing to rent instead of buy their homes, according to the latest data from RentCafe.
Why it matters: We've long been told real estate is the best investment you can make. But more people with extra cash are choosing to put it elsewhere.
What's happening: Renting is the better deal in nearly every U.S. city right now.
- So instead of dumping their capital into homeownership, rich renters are growing wealth by putting their money into "stocks, bonds, their own businesses, or other assets," RentCafe analyst Veronica Grecu tells Axios.
By the numbers: In the Phoenix metro area, 333 households with an annual income of at least $1 million rented in 2022.
- The Valley ranked ninth for millionaire renters among the two dozen metro areas RentCafe analyzed.
Zoom out: Phoenix's numbers paled in comparison with the New York area, which led the nation with nearly 5,600 millionaire renter households.
- The San Francisco Bay Area came in second with more than 1,600.
The big picture: The number of millionaire renters across the U.S. nearly tripled from 2020 to 2022, per RentCafe, and Grecu predicts the number will grow in the near-term.
Of note: 2020 millionaire renter data for Phoenix wasn't available, so it's unclear how much millionaire renting has increased here.
- Yes, but: The number of high-income renters — earning $150,000 or more — grew in Phoenix by 91% from 2016-2021, which was higher than the national average.
What they're saying: "Even though they're still a small group, the increasing number of millionaire renters indicates a shift in how well-off people approach lifestyle and investment decisions nowadays," Grecu said.
The other side: For those who rent out of necessity, things have been tough in the Valley, where high housing prices have made it difficult to buy and high rents have made it harder to find affordable apartments.
What we're watching: After leading the nation with an average 30% rent increase in 2021, rents dropped 5% between January 2023 and last month, the Arizona Republic reported.
- Some developers are also focusing lately on attainable apartments with affordable rent.