San Diego has the fourth highest percentage of renters in the nation as homeownership rates fall.
About 48% of households in the San Diego metropolitan area are renters, according to a new Redfin studybehind only the San Jose metropolitan area (52%), the Los Angeles and Orange County metropolitan area (51%), and New York (49%).
San Diego isn’t the only place homeownership rates are slowing. According to Redfin, the number of households renting in the United States grew 2.7% in the last three months, which was the largest year-over-year increase since 2015. The number of households renting is growing three times faster than those homes they own.
“Affordable housing has been at the forefront of this election cycle because many people are struggling to see how they will become homeowners, especially those in the younger generations,” wrote Redfin senior economist Sheharyar Bokhari.
He wrote that high home prices and still-high mortgage rates made renting the only viable option for many families and younger generations.
At the beginning of 2020, the San Diego metropolitan area, which includes all of San Diego County, had a renter rate of 43%, which increased to 48% as of the third quarter of this year. The homeownership rate was 57% then, and dropped to 52% recently.
The Redfin study, which uses data from the U.S. Census Bureau, noted that rent costs have remained virtually unchanged over the past 12 months in much of the nation (including San Diego), while while house prices have increased by around 6%.
Another reason Redfin cited for the increase in renters was an increase in apartment construction over the past two years. The country is building multifamily housing at its fastest pace in records dating back to 1994.
San Diego County built more homes in 2023 than in any of the last 17 years. The Construction Industry Research Board said 2,573 permits were for single-family homes and accessory dwelling units, while 9,100 were for multifamily, primarily apartments.
Competition among so many apartment complexes was seen by many experts as a reason for stagnant rental growth. Redfin said that makes renting more affordable than buying for many households who otherwise would have taken the leap into home ownership.
Redfin said the national percentage of households renting was 34%, 14 percentage points lower than San Diego. The average homeownership rate was 66%, compared to 52% in San Diego.
The lowest number of renters (22%) was recorded in Cape Coral, Florida, which has a homeownership rate of 78%. Other metropolitan areas with low renter rates were Charleston (23.7%) and Columbia (24.5%), both in South Carolina.
Several studies on housing were recently released, as affordability had become an issue for many local and national races in this election. Below is a summary:
- San Diego County had the fourth-lowest number of homebuyers under age 25, 1.9%, in the U.S., the industry group said Construction Coverage. It was behind San Francisco (1.2%), San Jose (1.3%), and Los Angeles and Orange counties (1.5%). Grand Rapids, Michigan, had the highest rate, at 9.1%.
- In your annual profile of home buyers and sellers, the National Association of Realtors said the percentage of first-time buyers fell to 24% of the market share, the lowest level since it began collecting records in 1981. The typical age of buyers who repeat homes increased to 61 years and the average age of first-time buyers reached its highest level in history, 38 years.
- The house price index September’s CoreLogic report indicated that national single-family home prices rose 3.4% annually, the slowest growth rate in a year. He noted that San Diego County prices had increased 4.7% at the same time.
Original Story
A city of renters? San Diego has fourth-highest percentage of renters in the U.S.
