SEATTLE--(BUSINESS WIRE)--

(NASDAQ: RDFN) — Nearly three-quarters of the most populous U.S. metropolitan areas (35 out of 50) have seen wealthy renters take up a bigger piece of the rental-market pie in recent years, led by Raleigh, NC and Orlando, FL. That’s according to a new from Redfin (redfin.com), the technology-powered real estate brokerage.

In Raleigh, 7.7% of renters are wealthy, up from 4.8% in 2019—the largest increase among the top 50 metros. It’s followed by Orlando (10.8%, up from 8.5%), Buffalo, NY (6.6%, up from 4.6%), Tampa, FL (9.4%, up from 7.9%) and San Diego (9.3%, up from 8%).

“Many affluent Americans are choosing leases over mortgages because the cost of buying a home has jumped significantly more than the cost of renting one in recent years,” said Redfin Senior Economist Elijah de la Campa. “With mortgage rates near 7%, renting frees up cash for other investments that may be more lucrative than real estate.”

In all of the metros mentioned above, the typical affluent renter earns more than they would need to afford the median-priced home for sale. But the cost of buying a home in those metros has risen more than the cost of renting since 2019, making renting increasingly attractive—even for the wealthy. Four out of five of these metros are in the Sun Belt, which saw home prices soar during the pandemic.

The median home sale price in Tampa, for example, is up 67.4% from 2019—the biggest jump among the metros Redfin analyzed. The income needed to afford the typical Tampa home for sale is up 63.1%—also the biggest gain among the metros in this analysis. By comparison, rents in Tampa have risen 51.6%. That, too, is the largest gain among the metros Redfin analyzed—but it’s smaller than the uptick in homebuying costs.

Nationwide, the income needed to afford the median-priced home is up 36.9% from 2019, while rents are up 28.1%. Redfin found that on average, the share of wealthy renters in a metro rose 0.5 percentage points for every 10% drop in homebuying affordability—a relationship that’s statistically significant at the 1% level. Please note that we consider a home affordable if a buyer taking out a mortgage spends no more than 30% of their income on their monthly housing payment.

High homebuying costs aren’t the only reason many affluent Americans opted to rent, according to , a real estate agent in Orlando.

“For a lot of folks, renting is all about opportunity. The U.S. economy and job market are in flux, and people want to be able to move and flow as things change,” Castro said. “I have friends who sold their home in favor of renting because they want the flexibility to move fast if their dream job surfaces in another state. They believe many employers won't offer remote work moving forward, and don’t want to be stuck with a home that may be difficult to sell quickly.”

Homebuying costs skyrocketed in Florida during the pandemic, but many parts of the state have seen prices fall over the last year amid intensifying natural disasters and a jump in HOA fees and insurance costs.

It’s worth noting that while wealthy renters gained share from 2019-2023 in most metros, renting in general became less common. In nearly every major metro, the rentership rate declined. That’s primarily because mortgage rates hit a record low during this period, prompting scores of people to buy homes. The fact that wealthy renters became more common at the same time that renting became less common suggests that many people who switched from renting to owning during the pandemic were not in the top income bracket.

San Jose and Orlando Have the Highest Share of Wealthy Renters

In San Jose, CA, 11% of renters are wealthy—the highest share among the 50 most populous metros. Next come Orlando (10.8%), San Francisco (10.4%), New York (10.3%) and Seattle (9.9%).

These metros have long been on the list of the most expensive places to buy a home, with the exception of Orlando, which saw home prices skyrocket during the pandemic. That’s one reason these places have a relatively high share of affluent renters. The median home sale price in San Jose, for example, is $1.4 million—the highest in the country.

But these metros also have a relatively high share of wealthy renters because renting is a lot more affordable than buying; the typical affluent person in San Jose would only need to spend 10.5% of their income on rent to afford the median-priced apartment, versus 21% to afford the median-priced home for sale—the largest gap among the top 50 metros.

These metros are expensive in part because they have such a high concentration of wealth. West Coast tech hubs like the Bay Area and Seattle gained popularity during the early 2000s, leading to a surge in home prices and an influx of wealthy workers. It was during that time that these areas saw the share of wealthy renters skyrocket. Between 2000 and 2019, the share of affluent renters in Seattle rose to 9.5% from 6.7%—the biggest gain in the nation. San Francisco saw the second largest increase, and San Jose wasn’t far behind.

“Many wealthy Americans can easily afford the median-priced home, but are renting to save up for the high-end home of their dreams,” de la Campa said. "When housing costs rise rapidly—be it in tech hubs during the early 2000s or Sun Belt boomtowns during the pandemic—that dream home takes longer to save up for, keeping folks renting for longer.”

Oklahoma City Has the Lowest Share of Wealthy Renters

Oklahoma City had the lowest share of affluent renters as of 2023, with just 4.7% of renters earning in the top 20% of local incomes. It’s followed by Cincinnati (4.8%), Hartford, CT (5%), Cleveland (5.1%) and Providence, RI (5.2%). These metros have among the lowest homebuying costs in the country, which is likely why affluent residents are less likely to rent.

Birmingham and New Orleans Have Seen the Biggest Drop in the Share of Wealthy Renters

In Birmingham, AL, 5.4% of renters are wealthy, down from 7.6% in 2019—the largest decrease among the top 50 metros. New Orleans saw roughly the same drop, to 5.4% from 7.5%. Next came San Francisco (10.4%, down from 11.9%), Pittsburgh (5.8%, down from 7.2%) Sacramento, CA (5.9%, down from 7%) and Oklahoma City (4.7%, down from 5.8%).

Birmingham, New Orleans, Pittsburgh and Oklahoma City all have median home sale prices below the national level. And in all of the aforementioned metros, the income needed to afford a home has risen less than the national average, which may help explain why some affluent Americans opted to trade their lease for a mortgage. In Pittsburgh, for example, the income needed to afford a home is up 19.5% from 2019—the smallest increase in the nation. The typical affluent Pittsburgher earns at least $145,295 per year, nearly four times what they would need to afford the median-priced home—the largest surplus among the top 50 metros.

San Francisco is the main outlier in the list above, as it’s very expensive. But scores of people moved out during the pandemic, contributing to a in home prices, which allowed many wealthy renters who did stick around to find good deals on homes for sale.

Redfin’s report is based on an analysis of U.S. Census Bureau, MLS and county records data from 2019 to 2023—the most recent year for which income data is available. Redfin considers a renter “wealthy” or “affluent” if their household income is in the top 20% of local incomes.

To view the full report, including charts, metro-level data and methodology, please visit:

About Redfin

Redfin () is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.8 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit . To learn about housing market trends and download data, visit the . To be added to Redfin's press release distribution list, email . To view Redfin's press center, .

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