A Generation of Young Millionaires Is Choosing Rent Over Ownership

More of America’s highest-income households are choosing not to turn their purchasing power into homeownership in a rental market that offers them more flexibility, mobility, and choice.

The number of U.S. households earning at least $1 million a year while renting the home they live in rose 229% between 2020 and 2024, climbing to about 18,400 households, according to a new RentCafe analysis of U.S. Census Bureau data.

“Standard measures treat renting as a fallback for people who can’t buy. Here, the top of the income distribution may increasingly be renting by choice,” explains Realtor.com® senior economist Hannah Jones.

And overwhelmingly, young high-income households are the ones leveraging that choice. Nearly half (49%) of millionaire renters are Millennials, whose numbers surged 392% between 2020 and 2024. While Gen Z accounts for just 2% of the market, its millionaire renter population grew 46-fold over the same period—the fastest of any generation.

Millionaire homeowner households also grew rapidly over the same period, rising 193%. Renters still make up only a small share of $1 million-income households, but their share rose from 8% to just under 9%, according to Jones.

It suggests that the trend isn't a rejection of homeownership but a generational complication of it. These younger millionaires came of age in a housing market dominated by the ultralow mortgage rate homebuying boom and the steep run-up in home prices and borrowing costs that followed.

And for many, it would seem, that made buying less of an obvious next step—even once they could afford it.

Why wealthy households are choosing to rent

Some of the dramatic growth comes down to math, according to Jones.

“Part of the gap is a base effect, since renters started from far fewer households, it is possible to see more growth,” she explains.

The total number of households earning at least $1 million nearly tripled, from about 70,000 to 208,000, and owners accounted for the overwhelming majority of that increase. In absolute terms, renter households grew by roughly 12,800, compared with about 125,000 additional millionaire homeowners.

Jones also notes that the $1 million threshold is nominal rather than adjusted for inflation, meaning some of the growth reflects more households crossing a fixed income benchmark over time.

Even so, the math still doesn’t explain why high earners might find renting attractive in the first place.

On that front, the occupational makeup of millionaire renters offers some clues. RentCafe's data says many work as chief executives, technology professionals, and financial managers—high-paying careers that can come with greater geographic mobility.

And renting gives these professionals something ownership doesn't: the ability to easily move.

About 21.6% of people living in renter-occupied households changed residences in 2024, compared with 6.2% of those living in owner-occupied households, according to U.S. Census Bureau data. Renters were also roughly three times as likely to have moved from another state.

That mobility can carry economic value of its own, particularly early in a career, when changing jobs—and sometimes cities—can open the door to better opportunities. Workers in their first seven years of employment got roughly 36% to 42% of their cumulative earnings growth from moves between employers, according to a 2021 study using U.S. Census Bureau employer-employee data.

RentCafe says this dynamic is particularly visible in Houston, where affluent newcomers—including executives, professional athletes, and entertainers—often rent after relocating before deciding whether to buy.

Homeowners, meanwhile, are getting hit with more incentives to stay put. Federal Reserve researchers estimate that mortgage rate lock-in explained 44% of the decline in mortgage-borrower mobility from 2021 to 2022.

The rate cycle also helps explain why millionaire renting survived a period that initially seemed tailor-made for buying.

“The rate environment worked both for and against these households,” Jones says. Ultralow rates made borrowing cheap early in the period, but inventory was scarce.

“By the time inventory started to recover, both prices and rates were higher, making buying less attractive,” she adds.

Millennials and Gen Z are reshaping millionaire renting

It’s an important point, because even at very high incomes, buying is never just a question of qualifying for a mortgage.

Jones points to the opportunity cost of tying up capital in a home, alongside taxes, childcare, and other costs of living—and those pressures are hitting younger households particularly hard. 

Homeownership rates fell in 2024 among households under age 45 while holding steady for older-age groups, according to Harvard’s Joint Center for Housing Studies. The typical first-time buyer is now 40 years old, a record, and first-time buyers account for just 21% of purchases.

They're also renting in a market that offers far more alternatives to ownership than it once did.

About 86.3% of apartments completed in the first quarter of 2024 were Class A units—the industry’s higher-end tier of newer rental buildings with premium locations, amenities, and rents—according to Moody’s CRE data cited by Fannie Mae.

The options extend beyond apartments, too. Homes built specifically to remain rentals accounted for about 8% of single-family housing starts over the four quarters ending in the second quarter of 2024, nearly three times their historical average share of 2.7%, according to an National Association of Home Builders analysis of U.S. Census Bureau data.

Where millionaire renters are growing fastest

The places where millionaire renting is most concentrated offer a dramatic illustration of its advantages.

Nearly 74% of millionaire renter households live in just eight metros: New York City, San Francisco, Los Angeles, San Jose, CA, Miami, Washington, DC, Boston, and Seattle.

New York City alone accounts for roughly 4 in 10 millionaire renter households nationwide. New York City, San Francisco, and Los Angeles together account for about 58%.

Some of that concentration simply reflects where the country’s highest earners already live. But Jones says those markets also share characteristics that can change the rent vs. buy calculation.

“New York, San Francisco, Los Angeles, and San Jose combine high-wage industries with very high price-to-rent ratios, limited supply, and large luxury rental stock,” Jones says. “In those markets, renting a premium unit can cost far less than buying a comparable one, and renting allows households to hold on to liquid capital as well as flexibility.”

New York City is the clearest example of scale, with 7,296 millionaire renter households. But its dominance also underscores the basic economics of the trend: The places where wealthy households have the greatest purchasing power can also be places where exercising that power through homeownership requires an enormous commitment of capital.

The San Francisco Bay Area shows what renters may get in exchange for avoiding that commitment.

San Francisco had 1,863 millionaire renter households in 2024, up from 499 in 2020, while San Jose had 895, up from 284.

At the same time, high-paying AI jobs are drawing workers to the region. Realtor.com data shows asking rents rose 6% year over year in San Jose and 4.8% in San Francisco in September.

That demand is being met by more high-end rental options. In the city of San Jose, luxury apartments under construction equal 4.6% of existing apartment inventory, compared with a 1.8% average across cities tracked by CoStar.

It's a dramatic example of why mobility can carry such a premium for high earners. Workers can move toward a rapidly changing center of job and wealth creation without first making a long-term bet on one of the country’s most expensive housing markets. And a deepening luxury rental market means they can do so without necessarily sacrificing housing quality.

But there's yet another route to the same outcome.

Millionaire renter households in Miami rose from 51 to 538, while luxury apartments under construction in the city equal 6% of existing inventory. Rather than a concentrated job boom alone, Miami combines affluent in-migration with expensive ownership and a growing stock of rentals built for households able to pay premium prices.

The markets are different, but that is precisely what makes the pattern revealing. Millionaire renting is not dependent on one local economic story. It appears where high-income households have both a reason to preserve optionality and a rental market sophisticated enough to make doing so attractive.