Just 55% of Californians own a home, third-lowest level in US

”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.

Buzz: The share of Californians living in a house they own didn’t budge during the pandemic era. That stagnation happened despite historically cheap mortgages and a feeding frenzy for houses.

Source: My trusty spreadsheet’s review of Census Bureau homeownership stats and Zillow home value indexes, comparing 2022’s nine-month averages vs. pre-pandemic 2019 levels.

Topline

In 2022, 54.8% of Californians lived in a home they owned. That ranked third-lowest level in the nation, just like 2019.

Equally disappointing is that the 54.8% statewide ownership level was unchanged from 2019. Only 11 states fared worse over three years that saw coronavirus upend the economy and the housing market.

Details

Where was ownership highest in the U.S. in 2022? West Virginia at 78.4%, then South Carolina at 75.8%, Maine at 75.4%, Iowa at 75.1%, and Wyoming at 74.8%.

Here are 36 reasons why California’s so darn expensive

Lowest? District of Columbia at 43.1%, then New York at 54%. After California comes Hawaii at 59%, and Nevada at 59.6%.

California’s arch-rivals? Texas was No. 45 at 63.5% and Florida was No. 28 at 67.9%.

But the pandemic didn’t alter housing markets equally.

Look at where ownership improved the most since 2019. Iowa was No. 1 (up 5.5 percentage points to 75.1%), then came Wisconsin (4.3 points to 70.4%), Louisiana (up 4.3 points to 69.9%), Maryland (up 3.7 points to 72.4%), and Wyoming (up 3.5 points to 74.8%). California rivals? Texas was No. 29, up 1.1 points. Florida was No. 20, up 1.8 points.

Next, ponder the 11 states with ownership dips.

No. 1 was Ohio (down 1.7 points to 66.5%), then came Tennessee (off 1.6 points to 67.2%), Montana (off 1.1 points to 67.7%), Utah (off 1 point to 70.8%), Hawaii (off 1 point to 59%), New Jersey (off 0.9 points to 64.1%), Connecticut (off 0.7 points to 63.6%), Massachusetts (off 0.5 points to 60.8%), Oklahoma (off 0.5 points to 68.4%), Kansas (off 0.4 points to 68.8%), and New Hampshire (off 0.3 points to 74.7%).

Let me offer one pattern that bonds this unusual grouping.

These 11 states added 1 million residents in the pandemic’s first two years, or a 1.9% increase. Compare that to the nation’s 1.1% population growth. And the 11 states with the biggest ownership gains added only 412,000 residents or 0.9% growth.

Perhaps states with falling ownership didn’t have enough homes for sale to meet this above-average rush of new residents. That likely boosted the number of new renters.

Bottom line

Price matters. And not just in California.

In the 11 states where ownership dropped since 2019, home values averaged $427,000 this year vs. $307,057 in the 11 biggest gainers. That’s a 40% gap.

Then look at surging prices due to population changes and the coronavirus buying binge.

Over three years, home values rose an average 41% where ownership dropped vs. 31% appreciation in the 11 biggest ownership gainers.

Local-local

Ownership change in California was not universal.

Progress was found primarily inland, where house hunters sought relative bargains. Declines were found on Southern California’s coast.

Here’s how California’s biggest housing markets fared among the nation’s 75 most-populous metro areas, ranked by their pandemic era’s ownership performance.

Fresno: 52.3% ownership (fourth-lowest rate) vs. 47% in 2019 – that’s a 5.3 percent-point increase (11th-largest gain of the 75).