3 days ago
The California city with the most 'rich renters' as affluent residents ditch buying houses for savvy reason
San Jose, California, has been named the US city with the most 'rich renters' as wealthy Americans ditch home buying for a savvy reason.
The tech hub topped a new study that found affluent Americans are increasingly abandoning homeownership as mortgage rates soar to 7 percent and property prices hit record highs.
Wealthy renters are now choosing to lease rather than buy despite earning enough to purchase million-dollar homes, according to a Redfin study.
Housing experts say wealthy renters are prioritizing flexibility and freedom in an uncertain economic climate.
Redfin Senior Economist Elijah de la Campa said: 'With mortgage rates near 7 percent, renting frees up cash for other investments that may be more lucrative than real estate.'
Redfin analyzed rental data from 2019 to 2023 and discovered that high earners now make up a growing share of America's rental market.
San Jose beat out Orlando, Florida for the top spot, with San Francisco, New York and Seattle rounding out the top five cities where the wealthy are ditching homeownership for rentals.
In San Jose, the median home sale price has reached a staggering $1.4million - the highest in the entire United States.
Now some affluent residents have decided that renting makes more financial sense.
The typical wealthy person living in San Jose would need to spend just 10.5 percent of their income to afford rent on a median-priced apartment, compared to a 21 percent to afford buying a median-priced home.
'Many affluent Americans are choosing leases over mortgages because the cost of buying a home has jumped significantly more than the cost of renting one in recent years,' said de la Campa.
And Juan Castro, a Redfin Premier real estate agent in Orlando, said: 'For a lot of folks, renting is all about opportunity. The U.S. economy and job market are in flux, and people want to be able to move and flow as things change.
'I have friends who sold their home in favor of renting because they want the flexibility to move fast if their dream job surfaces in another state.'
Housing experts say wealthy renters are prioritizing flexibility and freedom in an uncertain economic climate. Renting can 'free up cash for other investments that may be more lucrative than real estate'
The typical wealthy person living in San Jose would need to spend just 10.5 percent of their income to afford rent on a median-priced apartment, compared to a 21 percent to afford buying a median-priced home
'They believe many employers won't offer remote work moving forward, and don't want to be stuck with a home that may be difficult to sell quickly.'
At the other end of the spectrum, Oklahoma City, Oklahoma had the lowest share of affluent renters as of 2023, followed by Cincinnati, Ohio; Hartford, Connecticut; Cleveland, Ohio; and Providence, Rhode Island.
