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M R EP O RT | 39 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Top High-Income Renter Hotspots 1. New York, New York 2. Los Angeles 3. San Francisco, California 4. Chicago 5. San Jose, California 6. San Diego 7. Seattle 8. Houston 9. Washington, D.C. 10. Boston What Makes Those Who Can Afford to Buy Turn to Renting? Part of the answer may be found in high home prices, which made homeownership less attractive, especially for those well-heeled residents in pricey lo- cations. This becomes even more obvious when comparing home prices to renter income in the cities with the highest increases in high-income renters. The number of renter house- holds with incomes of more than $1 million also reached a record high of 3,381 in 2020—three times as many as there were in 2015, when 1,068 millionaires were renting their homes in the United States, according to the most recent data from IPUMS. According to a survey from Charles Schwab, Americans con- sider that an average net worth of $1.1 million represents being financially comfortable. Data also showed that it seems that being financially comfortable is a millen- nial trait, with this demographic making up a majority (28%) of millionaire renters. For many millennials of homebuying age and with above-average incomes, lifestyle renting is a better choice than owning. Gen X follows closely behind, making up 23% of millionaire renter homes. As the first generation that redefined and broke away from the American Dream of homeownership, Gen Xers initially turned to renting due to the strain brought on by the 2008 housing crisis. Today, they're following the same lifestyle renting trends as their younger counterparts. Data shows that the most popular jobs among millionaire renters are in management posi- tions (1,653); followed by securi- ties, commodities, and financial services sales agents (519); chief executives and legislators (468); software developers (459); and lawyers, judges, magistrates, and other judicial workers (421). According to IPUMS data, the rental home size of millionaire households varies across the United States, with three-bedroom homes being the national average. Millionaire renters in Washington, D.C., have the largest homes, on average, five bedrooms, followed by Jersey City, New Jersey, with four. Alternatively, in cities like Los Angeles, San Francisco, and New York, the average home size is three bedrooms. Wealthy renters live mainly on the coasts, specifically in California, New York, and Washington, D.C. San Francisco held second place in the number of millionaire renter households but had the biggest spike between 2015 and 2020. The Golden City's rental homes inhabited by mil- lionaires multiplied a whopping 17 times (1,629%), growing from 17 households in 2015 to a total of 294 in 2020. California is a mil- lionaire magnet, as the number of seven-digit income renters also rose significantly in Los Angeles, by 361%, to 143 in 2020. Washington, D.C., has 121 renters who earn over one million dollars per year. Major urban areas are the mil- lionaire renter hotspots, with New York at the top of the list with the highest number. Data also found that 2,457 renter households earn over a million dollars per year, three-quarters of the national total. Seattle, Miami, and Portland Boasted the Largest Increase in High- Income Renters in the U.S. High-income renters—those who earn at least $150,000 per year—are growing across the nation. According to U.S. Census data, in 14 cities across the United States, high-income tenants more than doubled in numbers in the last five years. Specifically, the 10 cities that saw the most signifi- cant increases in the number of rich renters are scattered mostly throughout the West and the South, with Seattle taking the lead as the fastest-growing high-income renter hotspot. To that end, high-income rent- ers nearly tripled in Seattle (169%) compared to 2015, making it the nation's fastest-growing area for affluent renters. As a matter of fact, 17% of renter households in Emerald City have an income of over $150,000. Here, their number increased from 12,305 to 33,111 in just five years—thanks, in part, to a healthy and diverse job market. Technology titans, such as Amazon and Microsoft, are fueling the employment needs of Seattleites, along with a booming biotech industry. Despite this, not even well-off Seattleites could keep pace with the growth of home prices in the last five years: 58%. A similar spike of 166% in wealthy renters pushes Miami into second place. Granted, homeownership in Miami-Dade County has been dropping consis- tently even before the pandemic. So, it comes as no surprise that 2020 saw an influx of rich renters, reaching a high of 8,653 house- holds (compared to 3,258 just five years prior). In third place, Portland, Oregon, registered a 148% rise in the number of high-earning renters, reaching 9,503 as of 2020. Despite salary increases rivaling home price increases, some well- off Portlanders still choose to rent. When looking at the total number of high-income renter households, New York is the "it" place for renters that earn over $150,000 per year. The Big Apple had a total of 296,594 such house- holds in 2020, representing a share of 11% of the national total. On the opposite coast, Los Angeles lags behind New York with 82,655 high-income renter households, despite registering considerable growth in the last five years. Two other California cities are in the top five: San Francisco and San Jose with 80,020 households and 34,585 respectively, while Chicago takes fourth place with 50,999. Overall, incomes on the West Coast are higher than elsewhere in the nation. In particular, San Francisco has the highest percent- age of high-income households who rent their home, with 36% registered in 2020, compared to 19% in 2015. The Bay Area city's high median income and high- paying jobs are the main explana- tion behind San Francisco's 86% growth in rich renters in this timeframe. In a similar situa- tion are San Jose, California, and Seattle, with high-income rental homes representing 25% and 17%, respectively, of the total renter households. Major urban areas are the millionaire renter hotspots, with New York at the top of the list with the highest number.