Wealthy home renters increase in Phoenix area
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.
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