What Percentage of Californians Own Homes?

Homeownership is a significant aspect of financial well-being and wealth accumulation for many households. The ability to own a home can provide long-term stability and is often considered a measure of economic prosperity. Understanding the patterns of homeownership in a diverse state like California reveals important insights into its economic and social landscape.

Current Homeownership in California

California’s homeownership rate stands at 55.3% as of January 2024, according to data from the United States Federal Reserve. When compared to the national average, California’s homeownership rate is notably lower. The national homeownership rate typically hovers around 65% to 66%. California’s rate is among the lowest in the country, with only New York occasionally exhibiting a slightly lower percentage.

Historical Trends in California Homeownership

Historically, California’s homeownership rates have shown distinct patterns. From 1940 to 1960, both California and the nation experienced a substantial increase in homeownership, driven by post-World War II economic growth and supportive policies. However, the state’s rate has generally remained stable near 55% for the past 60 years, while the national average saw a modest increase during the same period.

California’s homeownership rate peaked around 60.2% in 2006 before experiencing a decline during the Great Recession. This divergence between California and the national trend has widened over time, with the gap reaching approximately 14.8 percentage points in 2021.

Key Factors Influencing Homeownership Rates

Housing affordability plays a primary role in California’s homeownership rates. The state’s median home values are significantly higher than the national average, making homeownership less accessible. For instance, the median value of owner-occupied homes in California was 2.5 times greater than in the rest of the nation in 2020. In 2024, an income of at least $221,200 was needed to cover the estimated $5,530 monthly payment for a median-priced detached home.

Interest rates also directly affect affordability by influencing monthly mortgage payments and purchasing power. When interest rates rise, the cost of borrowing increases, limiting who can afford to buy a home. Constraints on housing supply, such as restrictive zoning laws and high construction costs, contribute to elevated home prices. This imbalance between demand and available housing creates a competitive market that pushes homeownership out of reach for many buyers.

Variations in California Homeownership

Homeownership rates vary across different demographic groups and geographic regions within California. Age is a significant factor, with younger adults facing challenges. For example, only 24.2% of young adults aged 25 to 34 in Southern California are homeowners, which is substantially lower than the national rate of 38.3% for the same age group. Older seniors aged 75 and above tend to have higher homeownership rates, ranging from 88% to 94%.

Disparities persist across racial and ethnic groups. White and Asian households exhibit higher homeownership rates compared to Black and Hispanic/Latino households. In 2021, the homeownership rate for Black 35-45-year-olds in California was approximately 23%, while for Hispanic Californians in the same age range, it was around 40%. Geographically, homeownership rates are higher in rural and suburban areas and lower in densely populated urban centers. For instance, Alpine County has one of the highest rates at 80%, whereas San Francisco County has one of the lowest at 38%. Within major metropolitan areas, rates can range from 47.9% in Los Angeles to 69.0% in Madera.