Should you buy or just keep renting? Easy answer unless you live in this county

It’s one of the most asked questions, just behind the meaning of life and if those jeans make you look …

For a large majority of Californians, the answer is easy and remains the same – renting is more affordable than buying. The figure is based simply on the cost of buying vs. renting and does not include other factors such as family needs, long-term financial planning and taxes. Just back-of-the-napkin numbers crunching.

But, if you live in Riverside County, buying a home is a better financial move than renting, according to ATTOM Data. Riverside and Wayne County, Mich., are the only two large counties nationwide where buying is more affordable than renting for the average household.

EVERY DOLLAR FOR RENT IN RIVERSIDE COUNTY

Riverside County, one of the most affordable in Southern California, has been dealing with fast-rising rents while home prices have inched lower during the fourth quarter.

The average three-bedroom house rents for about $4,800 per month in Riverside, a 37% increase compared to a year ago. The rent requires every dollar for the average household compared to 91% for families that purchased a home in the final quarter of the year. The median home price was $510,000, a 0.7% decline from a year ago.

From the Bay Area to San Diego, renting a house was more affordable than buying. But there were a couple of areas – including Bakersfield and Fresno – where the gap was narrowing (see table, below).

San Francisco and San Jose had the biggest disparity between buying vs. renting, with renters spending about half as much on monthly rent than the mortgage for the $1.5 million-plus homes. In a data head-turner, San Jose renters spend less than 30% of their income on rent, easily the lowest percentage in the state, followed by San Francisco at 37%. Big paychecks make the difference.

“Finding an affordable home remains a daunting prospect around the country for average workers, regardless of whether they want to buy or rent,” says ATTOM CEO Rod Barber. “Continuously increasing home prices contribute to the escalation of rental costs, making both buying and renting properties a challenging endeavor across most of the United States. But the latest data shows that even as rents are growing faster, they remain more affordable than owning.”

Renting was cheaper than buying in much of California during Q4 2024

RegionRent for a house % of income on rentMedian home price % of income on mortgage
Bakersfield$2,10044%$332,00052%
Fresno$2,25049%$389,00062%
Los Angeles$5,30083%$880,000100%
Riverside $4,800101%$586,00091%
Sacramento$2,49540%$510,00060%
San Diego$4,29566%$921,000101%
San Francisco$4,99037%$1.5 million80%
San Jose$4,19529%$1.67 million83%
Santa Rosa$3,30059%$810,000105%
Stockton$2,49551%$530,000 79%

Note: Rent is based on a three-bedroom house. Mortgage payment is based on a 30-year mortgage with a 20% down payment.
Source: ATTOM Data

Single women account for more than 10% of homeowners in California. ADOBE STOCK

Single women earn less but own more homes than single men in California

Buying a home is a big challenge in California. 

Fewer than one of every seven households could afford the median-priced home during the third quarter, thanks to the highest mortgage rates in decades and near-record high home prices, according to the California Association of Realtors.

So, the California dream requires belt-tightening to save for the down payment, shopping around for a favorable mortgage and much patience, especially in the current market where there are more home shoppers than homes for sale. And, quite often, more than one income.

But almost one of every five homeowners in California is a single, one-income homeowner, according to a recently released LendingTree survey based on U.S. Census Bureau data.

SINGLE WOMEN ARE MORE THAN 10% OF HOMEOWNERS STATEWIDE

And single women – who earn 88 cents for every dollar earned by men in the Golden State – own about 265,000 more homes than single men in California. Single women comprise about 11.4% of the homebuyers statewide, while men make up 7.9%.

The percentage of single-women homeowners was the fourth-lowest in the nation, but better than Texas. California’s single-men homeowner percentage was the third-worst in the U.S.

County-by-county figures were not available in California. But a Redfin report on single-women homebuyers in 2021 found 10%-15% ownership rates in much of the state, from Sacramento to San Diego. The figure dropped to 8% in San Francisco and 6% in San Jose, the priciest markets in the state.

If you were wondering, Delaware, Louisiana and Mississippi have the largest percentage of single-women homeowners in the U.S., around 15-16%. Single-women homeowners outnumber single-men owners in 47 states. 

The beach and bragging rights: Santa Barbara is best housing market for buyers. SHUTTERSTOCK

What’s the hottest housing market this winter? Of course, mild Santa Barbara

One of California’s priciest housing markets – just a few miles from the massive, multimillion-dollar estates of actors, media moguls and royalty – is the nation’s leading emerging market this winter.

Santa Barbara, also known as the American Riviera, earned the top spot on the Wall Street Journal/Realtor.com’s Winter Emerging Markets Housing Index. The closely watched index crunches data from hundreds of cities to determine where the demand for homes and job growth are the strongest.

And Santa Barbara, where brilliant beaches are just a few miles from rugged mountains, tops the list. 

Santa Barbara, about 90 minutes northwest of downtown Los Angeles, is the only West Coast city in the top 20, according to the Wall Street Journal. Salinas is the second California city on the list at No. 42. San Diego finished at No. 64, with San Jose-Santa Clara at No. 69.

$1.8 MILLION OPENS THE DOOR 

Many of the cities on the WSJ/Realtor.com index are in the lower-priced regions of the Midwest, South and Northeast.

But Santa Barbara, where homes are hard to find and even harder to buy with a median price of $1.8 million in December (six times more than second-place Jefferson City, Mo.), is a homebuyer and home investor’s dream. That hefty investment should generate a nifty return down the road, if you can afford to buy. 

Only one of every 10 households in Santa Barbara County could afford to buy a home during the third quarter, according to the California Association of Realtors. And that was based on CAR’s much lower median price of $1.1 million. A homebuyer would need to earn at least $286,000 to qualify for a mortgage with a 20% down payment – and deal with a $7,140 monthly payment.

Then again, you would sort of be neighbors with Oprah Winfrey, Rob Lowe, Prince Harry and Meghan Markle, and many other celebrities.

Lawsuits are challenging agreements with buyers’ agents and their compensation. ADOBE STOCK

Copycat class-action lawsuits filed against CAR, NAR and brokerage companies after $1.8 billion verdict

California brokerages and the statewide association have become the target of so-called copycat lawsuits that allege “anti-competitive” and “conspiracy practices.

The class-action lawsuits, filed in Sacramento and Southern California, challenge a decades-old practice of demanding home sellers to offer payment to list homes on broker-affiliated databases, also known as Multiple Listing Services.

Currently, a broker representing a seller collects a commission – as much as 6% – on a home sold, and then pays an agreed-on commission to the buyer’s agent. In a large majority of agreements, the seller does not negotiate the commission to the buyer’s agent.

If the lawsuits are successful, buyers would need to pay a commission to their real estate agent, creating another expense for buyers, who are often already struggling to qualify for a mortgage. 

CAR: ‘ALLEGATIONS ARE WITHOUT MERIT’

The California Association of Realtors, the organization that represents brokers and real estate agents in the state, was recently named in a class-action lawsuit in the Central Valley. 

The lawsuit, Gael Fierro and Patrick Thurber v. the National Association of Realtors, follows similar claims detailed in the Burnett v. NAR lawsuit by 500,000 home sellers in Missouri. 

A jury found that NAR artificially inflated home prices by connecting commissions paid to agents. An almost $1.8 billion jury verdict was awarded to the home sellers in October.  Re/Max and Anywhere Real Estate – which includes Coldwell Banker, Century 21 Real Estate and Sotheby’s International Group – agreed to settle for $55 million and $83.5 million, respectively.

“Suffice it to say, we believe these allegations are without merit for many reasons,” CAR president Melanie Barker says of the copycat lawsuits in California. “We will present those arguments in court and have retained highly experienced antitrust defense counsel who will work with our CAR legal team to do so.”

Numerous real estate companies have challenged the commission environment during the past several years.

“Rather than saying that a fee for the buyers’ agent of 2% or 3% is customary or recommended, agents will say that a buyers’ agent fee, if one is offered at all, is entirely up to the seller,” says Redfin CEO Glenn Kelman. “… People should hire buyers’ agents to see properties listed by a wide range of agents, to get guidance on how home-buying works, to understand the advantages and defects of the homes they’re buying and the deals they’re striking. Buyers can choose to work directly with a listing agent if they seek to avoid the fee paid to a buyers’ agent, and if they understand the tradeoffs involved.”

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