Rents soar in SoCal, Bay Area boasts priciest rates in U.S.
Fresno, Riverside among midsize cities with largest hikes in rent
By Ron Trujillofirstname.lastname@example.org
Los Angeles had the second-largest increase in apartment rent during the past year in the nation, and one of the biggest percentage gains, according to industry tracker RentCAFE.
The average rent for an apartment in Los Angeles is $2,461 per month, a $153 increase during the past year, and second only to the $157 boost in Manhattan in New York City.
Los Angeles’ 6.6% increase in rent was the third-highest among large cities nationwide, behind only Las Vegas (7.9%) and Phoenix (7.7%).
Five of the 10 most-expensive cities for rent are in California. San Francisco’s average rent of $3,609 was second in the nation, behind Manhattan ($4,200).
San Mateo finished in fourth place at $3,212, while Sunnyvale’s rent of $2,900 was the sixth-highest in the nation. Santa Clara ($2,850) and San Jose ($2,723) finished in eighth- and 10th-place, respectively.
Three California cities — Fresno, Riverside and Long Beach — were among the largest percentage increases for midsize cities in the nation, each rising more than 5.5%.
Photo of California apartments by Vladislav Gurfinkel/Shutterstock
New job, marriage are big motivators to buy a house
The California dream of buying a home is alive, but many renters say it would take a change in their current situation in order to become a homeowner.
Almost half of renters surveyed (45%) say a better job or bigger paycheck — or both — would encourage them to buy a home, while 40% say marrying a partner would help them embrace a mortgage payment, according to the California Association of Realtors State of the California Consumer Survey.
“It’s encouraging that the majority of renters still believe buying a home is more than just a shelter over their heads,” says Jared Martin, president of CAR. “While they may not be there yet, many renters are motivated to become homeowners as they recognize the many benefits.”
In general, renters considering homeownership are generally younger and more diverse. The median age is 35 and they have been renting the past eight years.
Almost three of every four are minorities, including half being Latino, according to CAR. The average renter surveyed had a median income of $40,000 and spends 45% of their paycheck on housing costs, much higher than the recommended 30%.
CA is tough market for millennials to become homeowners
Affordability is a big hurdle for home-shoppers in California, regardless of age.
But for millennials, those 35 years and younger, saving enough dollars for the down payment and qualifying for a mortgage is tough. In fact, many millennials don’t even consider buying a home in the Golden State, according to a recent study by LendingTree.
San Jose has the largest percentage of millennials who made the most requests for a mortgage in the state at 43%, the 15th-highest in the U.S., according to LendingTree. The average age for those millennial homebuyers was 29.6 years old.
San Jose is among the priciest housing markets in the nation, but the average household income tops $100,000, making buying a home more likely than other cities in the state.
For example, San Francisco had the second-largest percentage of millennial buyers in the state at 39% — and No. 32 in the nation. The average age for millennial buyers in the City by the Bay was 29.8 years.
Los Angeles, Riverside, Sacramento and San Diego finished at No. 40 or lower.
Salt Lake City had the largest percentage of millennial buyers at 51%, followed by Minneapolis and Pittsburgh. All three cities boast good-paying jobs and relatively affordable homes, especially compared to California.
Photo of downtown San Jose by StellaMC/Shutterstock