The American dream of owning a home is undergoing a significant shift, especially among affluent Texans. Over the last decade a growing number of high-income earners are choosing to rent rather than to own in growing cities like Fort Worth and Austin.
According to a RentCafe report of U.S. Census Bureau data, the number of renter households earning more than $150,000 a year increased by 217 percent between 2005 and 2015. This means that an impressive 1.2 million wealthy households joined the rental market, while the number of homeowner households in the same income bracket increased by a much lower 82 percent.
Fort Worth leads the pack with the highest growth of affluent renters in the country in 2015, with a 77 percent increase of renting households earning over $150,000, likely due to its chart-topping job growth. High-income homeownership in Fort Worth, on the other hand, grew by only 13 percent.
Austin also joins the ranks of the top 10 cities with the most growth in high-income renters, coming in at No. 8, below cities like Portland, Oregon; San Francisco; and San Jose, California. The Capital City saw a 31 percent increase in renters and just 14 percent for homeowners.
While the number of affluent renter households is growing at a rate far exceeding homeowners in both cities, the actual number of renter households is still much lower than the total number of owner households. There were 22,966 owner households in Fort Worth 2015 earning over $150,000, and only 4,858 renter households in the same income bracket. Similarly Austin had 43,534 owner households in 2015 to its 11,777 renter households.
Texas cities are no strangers to topping the charts for their rapidly growing job and real estate markets. Yet despite healthy incomes and a thriving real estate market, renters may be exhibiting a cautious “lesson-learned” aversion to homeownership in the wake of the subprime mortgage crisis. This shift may also reflect the rising demand in the luxury apartment construction boom, as millennials change their focus from suburban homeownership to urban high-rise living.