People are flocking to rent family homes and ditching the apartment lifestyle in Stockton.
Stockton is becoming a perfect destination for professionals who are priced out of the Bay Area and are willing to commute to keep their jobs. Despite the growing rent prices Central Valley city, renters are still dominating homebuyers in Stockton.
Sacramento is also a booming rental market and is scrambling to meet the high demand for rental units, despite adding more apartment units. However, just like in Stockton, renters are opting for single-family homes over apartment units in Sacramento, according to a recent report by Rent Cafe, a nationwide apartment search website.
Stockton led all California cities in growth of family home rentals with a nearly 75 percent increase. What's interesting is the apartment rental growth decreased by five percent. The stark contrast could support the fact that professionals are moving from the Bay Area into family starter homes rather than into an apartment.
Stockton also had the third highest net gain of single-family housing in the state, turning more than 12,000 homes into rentals. In Sacramento, home rentals increased by 33 percent while apartment rentals grew by nine percent.
Nationally, from 2007 to 2016 single-family rental homes in the U.S. grew by about 30 percent while apartment rentals grew by about 15 percent.
The reason why there is a large inventory of single-family homes is due to the housing crash in the late 2000s, according to Rent Cafe.
Many mortgages were picked up by investors from homeowners who could no longer make payments. The houses are now used as rentals.
However, today most of the homes are owned by a single landlord rather than a large investors. According to the report, rental homes have gained popularity for people who want to get out of an apartment into the privacy of their own home, but can't afford to buy a house.
Homeownership is especially difficult in California, and Sacramento is one of the toughest cities in the country to get the keys to your own home.
In Sacramento, a first-time homebuyer needs $55,102 for a down payment on a house, according to the study. Zillow calculates the average home in the Capitol City costs just over $314,000.
Many single people opt for living in houses with roommates and many baby-boomers choose to downsize and rent out their homes.