More millionaires around D.C. are choosing to rent
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The number of millionaire renters in the D.C. area more than tripled from 2020 to 2022, 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 with high mortgage rates and low inventory keeping D.C.'s homes pricey, more people with extra cash are choosing to put it elsewhere.
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," RentCafe analyst Veronica Grecu tells Axios.
By the numbers: The number of D.C.-area households consisting of millionaire renters grew from 73 in 2020 to 244 in 2022 — 234%, according to RentCafe.
The big picture: The number of millionaire renters across the U.S. nearly tripled from 2020 to 2022, per RentCafe data.
- Grecu predicts that number will continue to grow in the near term, especially in high-cost cities.
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," Grecu says.
- Inventory in D.C. remains low, especially in its most sought-after neighborhoods, meaning expensive prices and big mortgage payments.
- For instance, last year's median home sale price in Spring Valley, D.C.'s most expensive neighborhood, was $2.5 million.
"By renting — especially in top-notch neighborhoods — they can stay nimble, ready to move or shift their investments as the market changes," Grecu adds.
Yes, but: This trend likely won't last forever, says D.C. agent Daniel Heider, pointing out that this could also be a result of a lack of enticing inventory in the market.
- "You can't live in a stock," he tells Axios. "Owning property will always be the American dream."
Meanwhile: The high earners who are opting to buy around D.C. are increasingly doing so with cash.