Wealthy home renters increase in Phoenix area
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The share of wealthy residents of the Phoenix metro who rent instead of own their homes is on the rise, per a Redfin analysis of the latest U.S. Census Bureau data.
The big picture: Rich renters have increased in 35 of the 50 most populous U.S. metros, the real estate site reports.
By the numbers: 7.9% of Phoenix-area renters in 2023 were considered wealthy, an increase of 0.1 percentage points from 2019, according to Redfin.
- Researchers defined wealthy renters as those with a household income in the top 20% of local incomes.
- In the Valley, that's a minimum of just under $160,000.
- The income needed to afford a house here in 2023 was $64,156.
Zoom out: Nationally, 7.9% of renters qualified as wealthy, the same as in the Valley.
- Topping the list was San Jose, California, where 11% of renters are considered wealthy and the median home sale price in 2023 was over $1.4 million.
- The biggest increase in wealthy renters was seen in Raleigh, North Carolina, which experienced a jump of 2.9 percentage points to 7.7%.
- Tampa, Florida, had the biggest increase in median home sale price, spiking 67.4%. Meanwhile, Phoenix was third on the list with a 59.3% increase.
Context: Nationally, the typical affluent renter earned more than they needed to afford a median-priced home, per Redfin.
- But homebuying costs have climbed faster than rents, making renting attractive for many, even those with deep pockets.
Between the lines: Plenty of people also enjoy rental properties' amenities, flexibility and maintenance-free lifestyle.
- And some want to put extra cash toward other investments.
Threat level: The Valley faces a severe housing shortage.
- As of 2022, Phoenix had a deficit of about 120,000 homes while experiencing substantial population growth.
- That shortage is driving up home prices in a city that for decades was famous for its cheap housing.
Zoom in: Legislative efforts to alleviate the problem in Arizona have had mixed results.
- Gov. Katie Hobbs last year signed bills that open the door to more accessory dwelling units and "missing middle" housing.
- But efforts to encourage the building of starter homes by restricting cities' zoning authority have repeatedly faltered.
- Hobbs vetoed a starter homes bill in 2024, and this year's legislation stalled due to a lack of support.
What we're watching: In a growing number of cities, even starter homes come with luxury price tags, according to Zillow.
- Many affluent Americans are renting "to save up for the high-end home of their dreams," Redfin senior economist Elijah de la Campa said in the report.