Recent reports show that home equity is substantially increasing—but not everyone is rushing to take advantage of it, especially those “wealthy” households—those with an income of greater than $150,000 per year, according to data from RENTCafé.
The number of renter households earning more than $150,000 annually increased by 1.2 million up to 1.75 million from 2005 to 2015, a 217 percent increase, according to the 2015 American Community Survey. By comparison, the number of homeowner households increased by 82 percent during that same time.
What the data showed was that the higher the annual income, the larger increase in the number of rental households. The increase in rental households shrank along with the size of the household’s annual income.
The group earning more than $150,000 per year experienced the largest increase in the number of rental households in 2015 than any other income bracket, at 12 percent. Renter households earning between $100,000 and $150,000 increased by 9 percent in 2015; for those earning between $75,000 and $100,000, it was 7 percent; for those earning between $50,000 and $75,000, it was 4 percent; and it was 2 percent for those earning less than $50,000 per year.
“While affordability remains a major concern for many low-income renters, there’s a growing number of people that know nothing of— nor care about—the ‘30% of income on rent’ rule of thumb,” RENTCafé said in the report. “In fact, there’s a market for wealthy renters and it’s not lacking in demand.”
The market that had the highest increase in high-income renters from 2014 to 2015 was Fort Worth, with 77 percent. San Francisco is the second-most expensive rental market in the country (an average monthly rent of $3,472) but it also has 57,000 renters who earn more than $150,000 annually (the second-highest total in the country). Nearly a quarter of renters in San Francisco are of the high income variety, the largest share in the country. Additionally, in San Francisco, the number of wealthy renters outnumber the homeowners by approximately 4 percent.
New York City had the highest number of high-income renters in 2015, with 212,000, comprising about 10 percent of that area’s renter population.
Click here to view the complete report from RENTCafé.