Buying a home has long been a cornerstone of the American dream, but homeownership isn’t the right financial move for everyone — even for millionaires who can easily afford it.
From 2010 to 2015, the number of millionaire renters tripled, according to RentCafe, signaling a shift in how wealthy individuals approach housing. This trend continued, with data analyzed by The Wall Street Journal revealing that between 2018 and 2022, the percentage of households earning $750,000 or more that chose to rent increased to a record high of 10.5%.
While many assume that financial success automatically leads to homeownership, an increasing number of high-net-worth individuals are opting to rent instead. For many, the decision comes down to four key factors: high housing costs, better investment opportunities, lifestyle flexibility and uncertain market conditions.
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1. High home prices and mortgage rates make buying less appealing
Being a millionaire doesn’t mean folks are willing to make bad money moves. Right now, mortgage rates are between 6% and 7% for a 30-year fixed-rate home loan. Even though rates are slowly dropping, that’s still impactful on monthly payments.
For a millionaire buyer looking at a $1.5 million home, putting down 20% — or $300,000 — would still cost them almost $9,000 a month in principal, interest, taxes and insurance payments. And that’s not including utilities or other moving and living expenses.
While we may never see the 3% mortgage rates of 2021, interest rates still matter.
2. Renting offers flexibility, convenience and luxury
As return-to-office mandates increase and high-paying roles demand on-site work, some employees — millionaires included — may not want to be tied down to a single location. Renting provides the flexibility to relocate for career opportunities without the challenges of selling a home, a process that can take months. According to HomeLight, homes for sale spend an average of 66 days on the market, and that doesn’t include the time required for closing and moving.
Many luxury rentals offer more than a place to live, they provide a lifestyle. Upscale rental communities often feature concierge services, state-of-the-art fitness centers and resort-style amenities, making renting an attractive alternative to homeownership.
For example, The Residences at Book Tower in Detroit offers tenants high-end conveniences like coworking and meeting spaces, on-site restaurants and personalized concierge services. For frequent travelers or professionals who value convenience, these all-inclusive rental experiences eliminate the hassle of home maintenance while providing access to premium amenities that homeowners might have to build or manage themselves.
For many high-net-worth individuals, the combination of flexibility, convenience and luxury makes renting a more appealing option than committing to homeownership.
3. Renting frees up capital for better investments
Buying a home is often seen as a solid investment, but for many millionaires, it’s not necessarily the best use of their capital. Rather than tying up millions in real estate — along with property taxes, maintenance costs and market fluctuations — many wealthy individuals prefer to keep their money liquid or invest in higher-yield opportunities.
Diversification is key. Some millionaires choose to invest in stocks, bonds and private equity, while others channel their wealth into business ventures or commercial real estate that can generate passive income.
The S&P 500, for example, has delivered an average annual return of around 10% over the past decade, but in 2023, it soared by 26%, followed by more than 24% growth in 2024. With returns like these, many high-net-worth individuals see greater financial upside in the markets compared to homeownership, which typically appreciates at a much slower rate.
Additionally, real estate requires significant upfront costs, from down payments to closing fees, which could be deployed elsewhere for potentially higher returns. For some, the ability to quickly access capital for business opportunities, investments or even philanthropic endeavors outweighs the long-term commitment of owning a home.
Ultimately, for millionaires who view their wealth as a tool for financial growth rather than stability, renting allows them to remain agile with their investments while avoiding the liquidity constraints that homeownership can impose.
4. Limited supply
Homebuyers at every budget point have ideas of what they want in a home. Millionaires may have more cash to buy a house, but those available homes may not meet their preferences. At the end of 2024, Freddie Mac reported a 3.7 million-unit housing shortage, even as the economy was on the upswing.
Even though mortgage rates are dipping, homes aren’t selling at the same rate they were a couple of years ago. With a limited supply of available homes, many millionaires would prefer to rent until they can find a home that meets all their requirements. In some cases, the type of home they want simply doesn’t exist on the market, meaning they may need to build from the ground up.
Custom construction can be a lengthy and expensive process, requiring time for land acquisition, permitting and design before construction even begins. Once building starts, incorporating all of the features a buyer wants, luxury materials and smart-home integrations can extend the timeline, sometimes taking years to complete.
Faced with these challenges, some wealthy buyers opt to rent indefinitely, avoiding the hassle of construction while maintaining flexibility in an uncertain market. Others may even decide that homeownership isn’t worth the effort and instead choose long-term luxury rentals, where they can enjoy premium amenities without the commitment of building or renovating a home.
5. Other priorities
Not everyone sees homeownership as the best financial move. While they may have the means to buy, many prefer to rent, choosing to allocate their wealth toward other priorities. Some may want to launch a new business and need liquidity to fund their startup. Others might prioritize savings goals like early retirement and international travel.
Owning a home isn’t the right choice for everyone, regardless of income. For some, renting offers greater flexibility and financial freedom, allowing them to wait for the perfect home rather than settling for something that doesn’t fully meet their needs.
Wondering what mortgage rates look like today? Use the Bankrate tool below to find out.
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