'Wow, I Have All This Money And I Can't Find A House' – 10.5% Of Households With Annual Incomes Of More Than $750,000 Now Rent

If you've been watching the housing market lately, you've probably noticed that things have gotten pretty complicated even for people with a lot of money. According to an analysis by The Wall Street Journal, more high-earning households are choosing to rent instead of buying a home. 

Between 2018 and 2022, the percentage of households earning over $750,000 a year who rent rose to 10.5%, the highest since the mid-2000s. But why are millionaires opting to rent when they could buy?

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The reasons behind this trend are pretty straightforward. Home prices have skyrocketed to the point where even people making three-quarters of a million dollars a year are finding it tough to justify buying. Mortgage rates have doubled since 2022, making homeownership more expensive than ever. 

So, many are asking themselves, “Wow, I have all this money and I can’t find a house,” and “Why buy when renting is cheaper?“

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Take George Goognin, a millionaire fintech founder. He moved to the U.S. to buy a home, first in Silicon Valley, then Miami and finally New York. After months of searching and seeing nothing he liked, he rented a luxury three-bedroom apartment in Manhattan for $19,000 a month. He's part of a growing group of high-income earners choosing to rent.

This change is the result of several important factors. First, decent properties are limited and fairly priced even for those with millions to spend. Even for the wealthy, purchasing becomes less appealing financially due to high mortgage rates. Renting provides convenience and flexibility, as there is no long-term commitment and no need to worry about upkeep or fluctuations in the market.

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Furthermore, some people would rather invest in stocks or other assets than a house, particularly if they don’t think property values will rise considerably.

It's not just George Goognin. A recent study showed that between 2018 and 2022, the share of renters among households with net worths in the top 5% nearly doubled. That's a significant shift from the past when homeownership was the ultimate goal.

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Kris Mullins, Capital Max’s Chief Marketing Officer, believes that increasing demand makes rental homes a desirable investment because Gen Z and millennials are delaying homeownership or avoiding it altogether, favoring the freedom that renting provides. 

Mullins told GoBankingRates, “With a growing renter pool chasing a potentially limited supply of rental units, vacancy rates are likely to stay low, which translates to consistent rental income for property investors.”

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Real estate mogul Grant Cardone agrees with this sentiment. He added, “baby boomers will trade homeownership for rentals, tapping their equity for travel, investing and later for assisted living.” 

Cardone recommends that individual investors take advantage of the increasing demand for rentals, pointing out that in 50 of the largest cities, renting costs about half as much as owning a home, making rental properties a great investment opportunity.

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