The high-earning renter segment is growing rapidly according to a recent report from Apartmentlist.com. The higher-earning renter household ($100,000 annual earnings) is the “fastest growing segment of the U.S. housing market,” according to the report. Between 2008-2017, there were close to 2 million high-earning households to join the ranks of renters. That’s a national increase of 48%.
Apartment list’s Chief Economist Igor Popov weighs in on the subject. “We went into this suspecting high growth in that sector which was the case. Once we saw how much higher the numbers actually were, I was surprised,” Popov said. “Looking at the cities with tremendous growth and seeing just how large that growth has been was another surprise,” Popov adds.
The metro areas and percentage growth numbers Popov is talking about include Denver (146%)), Austin (142%), and Oklahoma City at 121%. Even high-priced markets like New York saw a 26% growth, Los Angeles at 33% and San Francisco had 65% growth. It’s not surprising since the cost of buying a home in these cities have put homeownership out of reach for many. Denver and Austin were the national leaders in high-earning renter growth. Both metros enjoyed an increase of nearly 2.5 times additional six-figure renter households in 2017 when compared to 2008.
According to Apartmentlist.com, over the last 10 years, there has been a significant increase across the United States in the number of high-earning renter households. That number surged from 3.8 million in 2008 to 5.7 million in 2017. “There’s been lots of inventory from new multi-family construction. Even though there are more higher-earning families, home ownership in some areas is still out of reach,” Popov observes.
It’s not surprising mid-size metros with strong population growth saw a surge in high-earning renters thanks to strong economies and relatively lower rents than larger metros. Also, in the top ten after Denver, Austin and Oklahoma City are New Orleans, Memphis, Raleigh, Minneapolis, Seattle, and Portland.
Let’s look at what your rental dollars will get you in the top three metros. In happening lower downtown Denver, a new luxury apartment in Union Denver, next to Whole Foods, there are four 1 bedroom and den units available, ranging in price from $3,230 to $3, 815. Amenities include swimming pools, hot tubs, outdoor TVs and indoor game room, theater and conference rooms.
Austin Texas has strong growth of high-earning renters GETTY
In Austin where tech start-ups have been growing, the Whitley Apartments offer a 698 square foot one-bedroom is currently available for $2,504. Residents enjoy an “urban sundeck overlooking the Austin skyline.”
Heading to Oklahoma City, there’s good inventory of newer apartment communities. Take the Metropolitan in downtown where a two-bedroom rents from $1,875 t0 $3,050. Expect to find a sophisticated lobby, cyber lounge, SPIN room, and social lounge. For Millennials renting a luxury apartment home means a more amenity-filled lifestyle, for now, that is.
Source: Ellen Paris for Forbes