San Diego has the fourth-highest percentage of renters in the nation as homeownership rates fall.

About 48% of households in San Diego metro are renters, said a new study, only behind San Jose metro (52%), the Los Angeles and Orange County metro area (51%) and New York (49%).

San Diego isn’t alone in seeing homeownership rates slow. The number of U.S. renter households grew 2.7% in the last three months, which was the biggest year-over-year gain since 2015. The number of renter households is growing three times faster than homeowner households.

“Affordable housing has been at the forefront of this election cycle because so many people are struggling to see how they will ever become homeowners — especially those from younger generations,” wrote senior economist Sheharyar Bokhari.

She wrote that high home prices and still-elevated mortgage rates made renting the only viable choice for many families and younger generations.

At the start of 2020, San Diego metro, which includes all of San Diego County, had a 43% renter rate, increasing to 48% as of the third quarter this year. The homeownership rate was 57% back then, falling to 52% recently.

The study, using U.S. Census Bureau data, noted the cost of renting has been mainly flat for the past 12 months across much of the nation (including San Diego) at the same time home prices have increased around 6%.

Another reason cited for increasing renters was a surge in apartment construction over the past two years. The nation is building multifamily housing at its fastest pace in records dating to 1994.

San Diego County built more housing in 2023 than it did in any of the past 17 years. The Construction Industry Research Board said 2,573 permits were for single-family homes and accessory dwelling units, whereas 9,100 were in multifamily, mainly apartments.

Competition among so many apartment complexes was seen by many experts as a reason for flat rent growth.

The national renter household percentage was 34%, 14 percentage points lower than San Diego. It was the average homeownership rate was 66%, compared to 52% in San Diego.

The lowest number of renters — 22% — was in Cape Coral, Florida, which has a 78% homeownership rate. Other metro areas with low renter rates were Charleston (23.7%) and Columbia (24.5%), both in South Carolina.

There were a number of housing studies released recently as affordability had become an issue for many local and national races this election. Here’s a roundup:

• San Diego County had the fourth-lowest number of homebuyers under 25 years old, 1.9%, in the U.S., said industry group Construction Coverage. It was behind San Francisco (1.2%), San Jose (1.3%) and Los Angeles and Orange counties (1.5%). Grand Rapids, Michigan, had the highest rate at 9.1%.

• In its annual profile of home buyers and sellers, the National Association of Realtors said the percentage of first-time buyers fell to 24% of market share, the lowest level since it started collecting records in 1981. The typical repeat buyer age increased to 61 years old and the median first-time buyer age hit its highest ever, 38 years old.

• CoreLogic’s Home Price Index in September said national single-family home prices rose by 3.4% annually, the slowest growth rate in a year. It said San Diego County prices had risen 4.7% at the same time.

Source: SDuniontribune by Phillip Molnar