PHOENIX — How well do you know your neighbors? If you live in metro Phoenix, there’s a growing chance they could be millionaire renters.
Valley households earning $1 million or more per year are increasingly choosing to rent rather than buy homes, according to a recent report from RentCafe.
The report, which analyzed data from IPUMS — a public database from the University of Minnesota — shows that from 2019 to 2023, the number of Phoenix-area renter households with seven-figure incomes increased by 519%. That’s compared to a 347% increase for million-dollar earners who chose to buy homes.
In fact, the Valley ranked sixth nationally on the list of major metros for trending millionaire renters, per RentCafe. Houston holds the top spot.
Why do millionaire renters opt not to buy homes?
Doug Ressler, manager of business intelligence at Yardi Matrix, said supply shortages and relatively high home prices have made more people hesitant to enter the housing market.
Ressler said home prices are growing faster than wages, changing the historical standard of what’s affordable.
“It should be about 3 to 1, so a family making $100,000 a year should be able to afford a $300,000 home. Well, today, that ratio has increased,” he said.
He said in some areas around the country, median home values are upwards of nine times the median household income.
“A short way of saying it is, a million dollars doesn’t buy you much anymore because the rules have changed,” he said.
The median sale price of a home in Arizona was $453,000 in May, according to Redfin.
Meanwhile, the annual median household income in Arizona was just under $77,000 in 2023, according to the most recent U.S. Census Bureau data.
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