As home prices steadily increase and inventory remains low, Dallas dwellers like many Americans are turning to renting over buying.
And it’s not just due to cost or supply constraints, according to a study from Rent Cafe. Millennials, who are now prime home buying age — initially priced out of the market — now are choosing to rent rather than pursue the “American Dream.”
Higher-income millennials are behind the boom in so-called “lifestyle renting,” according to the study.
“2021 is the year Millennials were forced to give up on the American dream,” the researchers report. “According to our latest analysis of 5.9 million rental applications, the share of Millennial renters with individual incomes above $50K is at a 5-year high – 43%. A surprising number considering the generation has reached homebuying age.”
High-earning Millennials saw a 20% rise in rental applications, more than any other buying-age cohort. Their growth drove this year’s 39% all time high of rental applications coming from individuals earning over $50k.
43% of all Millennials applying for rent this year earn over $50k – a sum which would have allowed for home-buying, if not for the restrictive prices. By comparison, the share of high earning Millennials applying for rent last year hovered to 36%.
“Today’s Millennial renter profile has changed significantly compared to last year,” reports Rent Cafe. “In 2021, we’re seeing applications for rent from individuals that earn roughly $4,300 more than last year’s applicants. This means even wealthier millennials resort to renting in the current house market.”
According to Rent Cafe, small town America is full of hotspots for millennial lifestyle renters.
Large cities where home-buying suddenly became mission impossible saw surges in high-earning Millennials applying for rent. Indianapolis saw a 51% increase in Millennial renter applicants who earn over $50K. Las Vegas had a 43% growth, while in Phoenix they increased by 39%.
Yet in Dallas, the suburbs saw higher increases in lifestyle renters than the city.
But the shift to renting is happening here in our neighborhoods too.
At a local level, I interviewed East Dallas resident Patrick Donlin for a broader housing story. His company owns and rents about 30 single-family homes around Dallas.
Based on market trends and what he is seeing, he says 75% of Dallas residents will be renters with 25% home owners by 2030.
We are taking a closer look at this and will report back after the holiday.