Seekers of houses are taking baby steps
California may be a tough spot to buy a home — but don't tell that to house hunters in the Inland Empire.
When my trusty spreadsheet looked at homeownership data from the Census Bureau for 75 large U.S. metropolitan areas — including six from California — comparing 2023 results with pre-pandemic 2019, it found the region comprising Riverside and San Bernardino counties moving up the charts.
Last year, Inland Empire ownership averaged 70.7%, the 14thhighest rate among the 75 metros. That share was up sharply from 64.3%, in 2019 when it ranked No. 41. This 6.3 percentage points improvement was seventh-best among the 75.
Consider how the coronavirus rearranged the economy — notably an extended period of historically cheap mortgages as health concerns created demands for larger living quarters.
The Inland Empire's housing market benefited from its relatively affordable housing — selling prices for single-family homes ran $562,000 last year, according to the California Association of Realtors, versus $815,000 statewide.
Plus there's been a major push by homebuilders to create more residences. The IE had 19% of California building permits for single-family residences during the past four years.
And the work-from-home rush allowed Southern California's coastal workers to consider owning a home farther inland.
Geographically speaking
Other California locales far from the Pacific also grew ownership sharply.
Fresno's 54% ownership rate may have been the nation's fourth-lowest, but it was up from 49% in 2019 (secondworst). That 5 percentage point jump ranked No. 13 among the 75.
Sacramento ownership also surged to 64.4% (No. 47) from 61.7% in 2019 (No. 54). The 2.7-point gain ranked No. 32.
Two Bay Area markets had growing ownership, too — but that may be due to an exit of renters in the pandemic era.
San Francisco's 55% ownership rate (No. 70) was up from 52.8% (No. 71) — a 2.1-point gain. (No. 36). San Jose's 53.5% (No. 73) versus 52.5% (No. 72) was up 1.1 points (No. 46).
The inland surge may help explain other Southern California declines.
Los Angeles's 48% rate was the national low, versus 48.2% (also last) — off 0.2 point (No. 54). And San Diego's 54.5% (No. 71) versus 56.8% (No. 68) was down 2.3 points (No. 65).
Statewide uptick
California's progress toward making the state friendlier for
house hunters comes in baby steps.
An average 55.9% of California households lived in a home they owned last year. It's a bit of a landmark moment: The last time the owners' share of housing had been higher was in 2010 at 56.1% — just after the Great Recession officially ended.
Now, the situation is still ugly. California has the nation's thirdlowest ownership share, just ahead of New York's 53.3% and D.C.'s 40.2%. By the way, California rivals Texas was seventhlowest at 63.6% and Florida was 18th-lowest at 67.3%.
The top state was West Virginia, ranking No. 1 with a 77% homeownership rate. The national rate was 65.9%.
Let's remember that homebuying since 2019 benefited from the Federal Reserve's extended generosity — cheaper interest rates used as a stimulus to a coronaviruschilled economy. Developers met some demand, too. California building permits in the past four years were one-third higher than the pace of the 2000s. Still, recent homebuilding runs onethird below the 1990-2010 average.
Plus the ownership rate may have been boosted a bit by California's population outflow in recent years. These exits skew toward younger, lower-income folks, a group more likely to rent than own.
It added up to California enjoying a small ownership uptick since coronavirus was added to our economics vocabulary.
California ownership rose 1 percentage point in four years — though 33 states did better. Texas ownership has risen 1.2 points since 2019. Florida was up 1.3 points.
Nationally, ownership is up 1.4 points since
2019. The nation's biggest leap was found in North Dakota, up 4.3 points to 65.7%.
Let's politely say more work must be done: Yes, California ownership is at a 13-year-high, but it's also essentially at where it was in 1993.