Apartment communities are seeing a boost in high income-earning resident applicants.
A growing number of wealthier new renters come from the millennial generation, who are driving the burgeoning lifestyle-renting market. At the same time, many would-be buyers are bowing out of the residential real estate market, trends are showing, according to RentCafe.
The share of rental applications for renters earning more than $50,000 is at a five-year high of 39 percent, according to new research from RentCafe, and rental applicants are making an average of 10 percent more this year than last year.
“Lifestyle renters have above-average incomes that would allow them to buy in a less competitive market,” RentCafe’s Alexandra Ciuntu said, in a report from GlobeSt. “Renting with a bigger budget allows them to live in amenity-rich, higher-quality apartments.”
The proportion of higher-earning millennial applicants was rising slowly through 2020, but the number spiked significantly in 2021, when earners over $50,000 accounted for 43 percent of all lease applications by the segment. About 42 percent of millennial renters applied to live in upscale buildings this year.
For many millennials, buying—especially in the current market—just doesn’t make sense.
Those renters are also increasingly looking to larger pads in smaller cities. This segment made up 43 of the 50 cities with the highest increases in rental applications among the high-earning millennial segment.