The number of rich renters is soaring in the Triangle. What’s behind the trend?
The number of well-off households deciding to rent rather than buy has exploded across the Triangle, according to a new study from RentCafe.
In Raleigh, the number of “rich” renter households — those with annual incomes over $150,000 — skyrocketed by 178% between 2015 and 2020, going from 1,877 to 5,224, the study found. Cary, meanwhile, saw its number of affluent renters grow by 90%. The city reached a high of 2,388 well-off renter households in 2020 compared to 1,258 just five years prior. Durham followed with a 76% jump, adding 937 rich renter households, going from 1,226 to 2,388.
The study said high-income earners represent 12% of Cary’s total renter population, while the shares in Raleigh and Durham are significantly lower — 6% and 4%, respectively.
The findings are based on data tracking the number of millionaire renter households between 2015 and 2020 from IPUMS and other data from U.S. Census.
So what’s behind the uptick?
“Part of the answer may be found in high home prices, which made homeownership less attractive, especially for those well-heeled residents in pricey locations,” said the study’s author, Andrea Neculae.
As North Carolina remains one of the fastest-growing states, home prices have risen dramatically across the Triangle over the last year, hitting a peak median price of $422,000 last June. Prices are slowly starting to come down, but the Triangle’s median sale price was still $395,000 in December — up 6.7% from a year earlier, according to the latest data from Triangle MLS.
The American household is also changing, the report noted. “Homeownership is not a priority for everyone, especially not for Millennials and Gen Zs.”
Perhaps that explains, in part, the emergence of luxury developments like Kane Realty Corp.’s 36-story luxury tower called The Eastern Residences at North Hills, which opened last year. The two 2,286-square-foot penthouses rent for a whopping $14,000 per month. Neither are available, according to The Eastern’s website.
Despite its growing high-income renter population, the Triangle wasn’t among the nation’s top 20 high-income renter hotspots. Major urban metros like New York, San Francisco and Los Angeles still top the list.
Nationwide, the number of renters earning more than $150,000 per year grew by 82% between 2015 and 2020, RentCafe found. Compare that to rise in renters overall — around 3.2%.
This story was originally published February 10, 2023 at 12:00 AM.
