From Rent to Riches? Renter Wealth & Financial Well-Being

At the Capital One Insights Center, we are proud to have the opportunity to fund publications through partner research organizations to contribute to the breadth of perspectives on economic mobility and financial well-being. 

Our recent partnership with researchers in the Aspen Institute’s Financial Security Program (FSP) led to the November 2024 publication of a significant baseline analysis on this subject. The report, titled “From Rent to Riches: A Profile on the Wealth and Financial Well-Being of Renter Households,” examines the wealth-building conditions of renter households and explores innovative approaches for expanding renter wealth. As of 2022, just over half of renters owned any appreciating asset, while 90% of renters are in the bottom half of the wealth distribution. 

While the report solely reflects the views and interpretations of Aspen FSP, we highlight it here because of its analytical contributions to the conversation. This study explores the financial well-being of renters and sets the table for innovative approaches to building financial wealth through avenues beyond traditional homeownership – an increasingly pressing issue for both policymakers and the private sector to tackle, in particular with the high cost of living at the top of consumers’ minds across various segments of the country. By quantifying changes in renter net worth between 2019 and 2022 relative to homeowners, the research assesses wealth accumulation differences between these two groups. 

As the path from renting to homeownership narrows, it is important to explore ways to enhance the financial well-being of renters in the United States. A deeper empirical understanding of the conditions for building wealth for all Americans–renters and homeowners alike–is crucial to ensuring that the acute housing shortage does not inhibit economic mobility while federal, state, and local actors work toward solutions. 

Expanding the Low-Income Housing Tax Credit (LIHTC) is one such solution, being the primary tool for creating and preserving affordable rental housing nationwide. As noted in the report, local markets need substantial increases in housing supply generally, but especially for efforts that maintain and increase the supply of affordable rental housing.

Capital One has long been an industry leader in financing affordable housing, including through the LIHTC program; in 2023 alone, Capital One financed more than $5.4 billion of affordable housing nationwide. As a stakeholder and champion of the LIHTC program, Capital One has also been a leading voice and supporter with Congressional lawmakers to pass the bipartisan Affordable Housing Credit Improvement Act (AHCIA) – comprehensive legislation aimed at expanding and strengthening LIHTC, which now has over 50% of Congress signed on in support. According to the Affordable Housing Tax Credit Coalition, the AHCIA would help finance the creation or preservation of more than 2 million additional affordable homes over the next 10 years. By advocating for AHCIA and the expansion of LIHTC, stakeholders can help increase one of the tools available to address the housing shortage and increase the financial health of renters.