As fewer consumers can afford to buy a home, more folks are staying in apartments and rental homes longer in California.
A lot longer.
More than one of every five households (21.2%) had rented their apartment or single-family home for a least a decade in 2023, compared to 14.5% in 2013, according to Redfin. The figures are based on an aggregate of six cities in the state, from the Bay Area and the Sacramento region to San Diego (see table, below).
Almost 28% of Los Angeles-area households are decade-plus renters, followed by 26.4% in San Francisco.
SKY-HIGH PRICES KEEP RENTERS GROUNDED
The biggest reason is simple – the cost of buying a home.
Fewer than one of every five households could afford to buy the median-priced home during the third quarter in California, according to the California Association of Realtors. That’s an about-face from the 56% in third-quarter 2012, when home prices were cut in half during the housing crisis and the subsequent Great Recession.
Five years ago, the state’s median home price was $570,000, compared to $814,000 in 2023 – a 43% increase, according to CAR.
RENTING MAKES MORE FINANCIAL SENSE FOR MANY RESIDENTS
So, the so-called “great stay” that is encouraging homeowners to remain in their current homes where they have 3%-4% mortgage rate also applies to many renters, unable to buy but also experiencing small rent increases.
“Monthly mortgage payments have nearly tripled over the past decade, preventing many renters from being able to buy a home,” says Sheharyar Bokhari, senior economist for Redfin. “Rents spiked during the pandemic but have stayed relatively flat over the past two years as home prices and mortgage rates continued to climb. That has encouraged renters to stay in the same home, where they are less likely to face major rent increases.”
That was not the case a decade ago, when home prices dropped and mortgage rates were low, as the economy crawled back from the Great Recession.
CONSTRUCTION BOOM HELPS RENTERS, LIMITS RENT INCREASES
Almost three of every 10 renters (28%) had one-and-done leases before they bought a house or relocated to another rental residence in 2013. The figure has declined to fewer than 22% of renters move within a year.
Of course, some apartment residents prefer to rent, especially in new apartment communities with hard-to-beat amenities, such as first-class fitness centers and saltwater pools with cabanas – and often near bustling shopping districts.
Plus, as more apartment communities are completed – the most since 2012 – more renters are staying put and paying less.
“The recent construction boom has also led to a record number of new apartments hitting the market, keeping rents down and setting 2025 up as a renter’s where more Americans will choose to rent, or remain renters.” Bokhari says.
Fewer renters are one (year) and done — and many are staying a decade or more
| City | 1-year or less 2023 | 1-year or less 2013 | 10+ years 2023 | 10+ years 2013 |
|---|---|---|---|---|
| Los Angeles | 16.7% | 23.5% | 27.8% | 21.2% |
| Riverside | 18.9% | 30.9% | 20.0% | 21.2% |
| Sacramento | 23.1% | 34.5% | 18.5% | 10.6% |
| San Diego | 23.3% | 27.2% | 16.7% | 11.4% |
| San Francisco | 20.8% | 23.4% | 26.4% | 18.7% |
| San Jose | 26.1% | 27.6% | 17.9% | 12.9% |
Source: Redfin
