The share of higher-income Millennials who are renting instead of buying a home is at its highest level in five years, according to RentCafe. As many as 39% of rental applicants in 2021 had individual incomes over $50,000 compared to 32% five years prior.
These lifestyle renters could afford to buy homes in a less competitive market, but a higher rental budget means more amenities, and many would-be buyers are also deterred by rising home prices and low housing supply. A 2020 RentCafe survey revealed that 43% of renters who considered taking the leap toward homeownership last year were hindered by the pandemic and the market frenzy that followed.
Renting continues to be the go-to option in 2021 for a growing number of people with incomes that might allow them to purchase a home. According to our most recent analysis of rental application data, as many as 39% of applicants in 2021 had individual incomes above $50,000 — up from 32% five years prior.
This year’s rental applicants are making on average 10% more than those who moved last year, the equivalent of $4,300 more in annual wages. Of all renter groups of typical home buying age, the share of Millennials with incomes greater than $50,000 saw the fastest increase in 2021 — a significant 20% more than in the previous year.
And, although the trend is most evident among Millennials, the home buying market frenzy is deterring other generations, as well. For example, Millennials, Generation X and Baby Boomers all saw a rise in applications from higher-earning renters in 2021. Specifically, the share of Millennial rental applicants who earn more than $50,000 was 43%, up from 36% in 2020, while Gen Xers in the same income range represented 55% of rental applications within their generation, up from 49% the year before.
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