These well-heeled tenants could easily afford to become homeowners, but they’d simply rather not.
For most Americans, it’s finances that keep them from purchasing property — but among the extremely wealthy elite, for whom money is hardly an object, there is a growing preference towards renting instead of buying.
Over the past 15 years, the number of households in the top 5% of net worth has almost doubled, to close to 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 making more than $750,000 and still choosing to rent went up to 10.5% compared to 8.4% five years prior, the outlet further determined based on census data.
As for why millionaires are choosing to forego buying, reasons range from high interest rates to a dislike of available residential 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,’” Ruthie Assouline, who co-leads a Douglas Elliman Real Estate team that specializes in luxury, told the Journal.
“In terms of price for value, the supply is close to zero,” millionaire fintech startup founder George Goognin said of his disappointment with high-end real estate’s current offerings, which drive him to rent his current $19,000-a-month Manhattan three-bedroom unit.
In the case of biotech executive Arun Das and his wife, the pair were able to find an perch they liked — an historic Philadelphia five-bedroom in Rittenhouse Square — but found the major renovation process they undertook on it to be rife with unexpected expenses and delays.
As a result, they eventually chose to sell the row house and rent at a high-rise in the area instead.
“We steadily began to realize the magnitude of the task ahead of us, not even in terms of financial resources, but just time and effort and coordination,” Das said of the renovation. “The hour that we can save a day, it’s time that we can spend with the kids or to have a glass of wine together.”
