California Sees Population Rise to 39.13M, SoCal Leads with Housing Boom

Key Takeaway

• California's population increased by 67,100 to 39.13 million, reversing a decline, with significant growth in Southern California.
• The rise attributed to lower mortality rates, rebounding legal immigration, and an increase in housing units including over 22,800 "granny flats."
• Riverside and San Bernardino counties led the growth with increases of 0.57% and 0.4%, respectively.

Reversal of Fortune: California's Population Bounces Back

After years of decline, California has witnessed a pivotal shift in its demographic trends, with the state's population increasing by 67,100 residents to reach 39.13 million. This resurgence is primarily concentrated in Southern California, which has emerged as the epicenter of growth. The reversal from a declining trend since 2020 to a positive growth rate last year is attributed to a combination of lower mortality rates, thanks to effective public health measures, and a rebound in legal immigration facilitated by the easing of visa restrictions. This development is significant, considering the state's struggle with population loss over the past few years.

Housing and Population Growth: A Symbiotic Relationship

The population increase in California, particularly in Southern California, is closely tied to the state's housing dynamics. The construction of new housing units, including a notable rise in accessory dwelling units or "granny flats," has played a crucial role in accommodating the growing population. Los Angeles County alone saw a net gain of over 21,000 housing units, contributing to the state's efforts to mitigate its housing shortage. This surge in housing development is essential for sustaining population growth and addressing the long-standing issue of housing affordability in the state.

The Economic Implications of Population Growth

The population growth in California, especially in the Southern counties, has broader economic implications. It signals a potential shift in the state's economic landscape, with increased demand for housing pushing home prices to record highs. Despite a decrease in transactions, the median home price in Southern California reached a staggering $753,000. This price surge, coupled with the population increase, underscores the complex interplay between housing availability, affordability, and demographic trends. The rise in home prices, while beneficial for some homeowners, poses challenges for potential buyers, especially in a market characterized by high interest rates and limited inventory.

A Closer Look at Southern California's Housing Market

The housing market in Southern California reflects the broader trends observed statewide, with record-setting home prices in counties like Orange, Riverside, and San Diego. However, this increase in home values comes amid a slowdown in sales, highlighting the challenges of affordability and accessibility for many residents. The high cost of financing, driven by rising interest rates, has further exacerbated these challenges, making it difficult for many to enter the housing market. This situation raises questions about the sustainability of growth and the need for policies that address the underlying issues of housing supply and affordability.