Let’s discuss one lightly mentioned nudge to California’s stubbornly high housing costs: a ton of money flows through the state’s household checkbooks.

Consider what my trusty spreadsheet found when eyeballing per capita personal income for the 50 states as tallied by the U.S. Bureau of Economic Analysis. This quarterly stat adds up what’s paid to residents — from paychecks to investment proceeds to government benefits from welfare to Social Security — then divides that sum by the population.

According to this math, California incomes grew at an average annual rate of 6.7% in the four quarters through September 2024. That’s the swiftest gain among the states and easily tops the 4.7% national pace.

It’s a cash cow that supports California’s stubbornly high housing costs.

Following the Golden State’s income growth, Hawaii was up 6.5%, and Vermont and New York were up 5.7%. The U.S. laggards were North Dakota, down 1%; Nebraska, up 1.3%; and Iowa and South Dakota, up 1.5%.

This noteworthy surge boosted California’s per capita income to $85,300 annually, the fourth-highest among the states and 18% higher than the nation’s $72,400.

Ahead of California were Massachusetts at $94,400, Connecticut at $93,500,and New York at $86,200. The nation’s tiniest income was Mississippi, at $51,500.

We often wonder who can afford California. This income yardstick suggests that numerous Golden Staters have received robust pay increases, noting that these stats track wealth created inside and outside the traditional workplace.

Buying boost

You’d think soaring mortgage rates and a mushy job market would depress California home prices.

Well, peek at the November home-price report by First American Data & Analytics, which covers 30 U.S. metro areas, including six in California.

Orange County’s 7.7% 12-month gain was the nation’s best. However, that headline-grabbing trend was a bit of an outlier, as other California gains were meek.

San Diego prices rose 3.7% in a year, Inland Empire was up 2.4%, Sacramento increased 1.9% and Los Angeles County had a 1.4% gain. But in Alameda and Contra Costa counties, prices fell 0.3%.

Statewide, prices were up 2.5% in the year ended in November. Yes, a modest increase.However, despite unfathomable affordability challenges, California homes remain a rising expense — even though appreciation ranked No. 44 among the states.

Mixed rents

Despite some hopes that 2024 might be a tenant’s market, barely half of California markets surveyed by one study had falling rents.

Rent stats from ApartmentList show rent drops in just eight of 15 larger California cities last year. Those declines are on par with the 49 dips among 100 big rental markets tracked in the report. Nationally, rents fell 0.6% last year, by this math.

California’s biggest rent jumps were in San Francisco (up 4.3% over 12 months), San Jose (up 3.2%) and Irvine (up 2.1%). The most significant declines were in Oakland (off 3.3%), Santa Ana (off 1.5%), and Los Angeles (off 1%).

Basically, landlords made modest adjustments in 2024. Yet it’s intriguing to see rent cuts primarily in California’s cheaper markets.

Is it budgetary stress among lower-income tenants? Massive pay hikes for a fortunate few? Or are the California workers headed back to offices boosting rental demand for pricier, urban communities?

Contemplate these 15 California cities when sliced into two groups — rents down versus rents up.

Rents for one-bedroom units averaged $1,662 in places where rents dipped—well below the $2,178 charged where rents increased.

For two bedrooms, rents averaged $2,044 in cities with falling rents versus $2,653 in rent-hike locales.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com.