Millionaires are increasingly renting instead of buying

These well-heeled renters could easily afford to become homeowners, but they simply would prefer not to.

For most Americans, it’s finances that hold them back from buying property — but among the ultra-wealthy elite, for whom money is hardly an object, there’s a growing preference for renting over buying.

Over the past 15 years, the number of households in the top 5% of net worth has nearly doubled, to roughly 5%, the Wall Street Journal reported based on the Federal Reserve’s Survey of Consumer Finances.

More recently, between 2018 and 2022, the number of households earning more than $750,000 and still choosing to rent increased to 10.5% compared to 8.4% five years ago, the data further determined of registration.

As for why millionaires are choosing not to buy, the reasons range from high interest rates to a dislike of available housing inventory – to not wanting to be responsible for maintenance issues.

“That’s a funny conversation we have with a lot of our clients, who say, ‘Wow, I have all this money and I can’t find a house,'” says Ruthie Assouline, who co-runs Douglas Elliman Real Estate. team specializing in luxury, told the Journal.

“In terms of price for value, the supply is close to zero,” said millionaire fintech startup founder George Goognin of his frustration with current high-end real estate offerings, which prompt him to deal with rent $19,000 a month in Manhattan. bedroom unit.

In the case of biotech executive Arun Das and his wife, the pair were able to find a spot they liked—a historic five-bedroom in Philadelphia in Rittenhouse Square—but found that the major renovation process they undertook for it was fraught with unexpected expenses and delays.

As a result, they eventually chose to sell the house next door and rent in a high-rise in the area.

“We began to steadily realize the magnitude of the task before us, not even in terms of financial resources, but just time, effort and coordination,” Das said of the renovation. “The hour we can save in a day is the time we can spend with the kids or have a glass of wine together.”