The Unexpected Reason Millionaires Rent Instead Of Buying A Home

The age old question of buying versus renting seems to be settled in most people's minds. For many, buying a property to call your own is embedded in the very fabric of the conceptualized American Dream. But homeownership is increasingly growing in its costs. Not only are house prices consistently on the rise over the long term (although data from the St. Louis Federal Reserve suggests something of a cooling off after the red hot pandemic market), interest rates have been spiking, too. This means that list prices are substantial, and the ongoing costs to finance these purchases has been overheated.

Even so, home buyers are still moving at a blistering pace. Sales are down from the height of the pandemic buying spree, but the figures remain in line with pre-pandemic market trends. Among typical home buyers, there are some key signs that signal a preparedness to purchase. However, the behavior of high net worth individuals might be worth exploring, as well as pressing pause on going all-in on buying your next home. Indeed, many people who count themselves among America's millionaire cohort have opted to rent their abode rather than buying it. Naturally, there are a great many factors at play when it comes to determining the right course of action, but understanding why the wealthy intentionally choose to engage with the real estate market in a way that many consider to be the lesser option can be useful, if fairly unexpected.

Buying a home is frequently thought of as a sound investment strategy. Buying a property gives you an ownership stake in a tangible asset that will almost certainly continue to grow with time. Paying off your mortgage and letting time work its magic will see your actual value grow at a speedy clip. But it's not always easy, or even logical, to leverage your home as an asset. Your home should primarily be a place to live first, and a financial tool second. While you can utilize it to take out a home equity loan, this isn't always the best approach to financing a renovation or covering another big expense like medical bills or college tuition.

Millionaires tend to maintain a consistent focus on leveraging their investment dollars to provide growth opportunities and diversification coverage. Therefore, an investment that can't easily be tapped into is something that doesn't really fit this ethos. As a result, many millionaires don't view their home as an investment in the way that traditional thinking might frame the asset. Tying up capital in a down payment is more expensive than handing over a deposit for a rental. This means that millionaires might lose out on the potential for asset growth in the place they call home, but they retain far more free cash to invest in higher upside options elsewhere. The median down payment, as of February 2025, was $55,550, per ATTOM, while the standard deposit for most rentals is just one month's rent.

In 2024, Ramsey Solutions found that millionaires frequently don't work in fields that pay the best salaries. In fact, many of the highest paying jobs in the U.S. are largely centered around the medical profession, but with these inflated earnings comes a lengthy commitment to educational attainment — and hefty educational debt. Engineers, educators, project managers, accountants, and lawyers are some of the other most prominent positions within the millionaire class. Moreover, around a third of all millionaires have never earned six figures during any single year of their working careers.

These data points tell us that millionaires are largely frugal savers, rather than specifically high earners. Investing in great stock market assets or other opportunities is what builds their consistent wealth — as does inheritance and other benefits that family members might provide to kickstart a career and lifestyle. Another consideration lies in the fact that many high earning professions center on an element of contract work. Engineers and lawyers are just some of the workforce that work limited contracts with the promise of higher wages during short term project parameters. With this increased mobility, there is often a desire or necessity to move more frequently which can make renting the better choice for greater ease of movement. Selling your home can be long and arduous at the best of times, but it's much simpler to pack up and move at the end of a lease.