More higher-income millennials are opting to rent rather than buy a home, according to a new study from RentCafe. This demographic has seen a 20% rise in rental applications in 2021, more than any other buying-age cohort. The share of rental applications from individuals earning more than $50,000 is at its highest level in five years, 39%. For millennials specifically, the share of rental applicants who earn more than $50,000 is 43%, up from 36% in 2020.
“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,” reported Alexander Ciunti, a researcher at RentCafe. “According to our most recent analysis of rental application data, as many as 39% of applicants had individual incomes above $50,000—up from 32% five years prior.”
According to RentCafe, the millennial renter profile also has changed significantly in 2021 compared with last year. This year’s applicants are earning on average 10% more, or roughly $4,300, than those who moved in 2020. In addition, with the increase in high-earning renters, the demand for high-end apartments also is on the rise; 42% of millennials applied to live in upscale buildings in 2021 compared with 38% five years ago.
Some of the nation’s smaller markets are gaining traction with the millennial lifestyle renters. Of RentCafe’s top 50 cities ranked by millennial renter applications, 43 have populations less than 300,000. Among millennials who earn more than $50,000, Macon, Georgia, leads the list nationally with an 83% rise in applications. Mesa, Arizona, comes in second with a 78% increase in one year, followed by Spokane, Washington, with 75% more higher-income millennials applying for apartments.
Larger cities where escalating home prices have made buying more difficult also have seen a rise in high-earning millennial renter applicants. Indianapolis has seen a 51% boost in applications from millennial renters who earn more than $50,000 this year compared with 2020. Las Vegas and Phoenix also have seen their share of rental applications among this demographic rise 43% and 39%, respectively, from last year.
