Aside from a bit of speculation that area home prices might be on the way down, potential homebuyers in LA haven’t had all that much to celebrate lately. Sadly, a new report from Apartment List is no exception. It shows that the number of homeowners in Los Angeles has dropped off significantly since pre-recession days. According to the data, the city’s rate of homeownership dropped from 52.3 percent in 2007 to 49.8 percent in 2010. Alarmingly, that number has continued to fall since then, in spite of an improving economy. As of 2016, the rate of homeownership stands at a measly 47.8 percent—a drop-off of 4.5 percent since the beginning of the recession and (again) the lowest number in the nation.
Among specific demographics, those numbers are even worse. The study found that national declines in the rate of homeownership have especially affected African American and Hispanic communities, along with basically anyone under the age of 45. Nationwide, that number is down nine percent for people between 35 and 44. Meanwhile, home ownership just isn’t happening for millennials right now. The national rate for adults under 35 is less than forty percent. A separate study from Lending Tree found the percentage of millennial homebuyers to be just a hair over 36 percent.
Unfortunately for all those people out there not buying houses, it’s actually been a pretty good time to do so lately. Interest rates are down, and in Los Angeles, monthly mortgage payments are down more than 18 percent. Meanwhile, the cost of renting in an increasingly competitive market has gone up about four percent since 2007.
Still, renting continues to be the only option many potential homebuyers can afford. Even with the price of renting on the rise, it’s still cheaper than owning in LA by almost $1,000 per month. Meanwhile, a separate study from Trulia found that median first-time homebuyers in LA need to spend an astonishing 88.1 percent of their income in order to purchase a simple starter home.
If there’s a silver lining to this, it’s that Los Angeles was far from being the metro area most affected by declining rates of homeownership. Just a couple hours to the south in San Diego, homeownership declined 8.1 percent. It also dropped 4.1 percent in Riverside County and 6.6 percent in San Jose. The market that saw the steepest decline in homeownership was Syracuse, New York, with Orlando and Tucson trailing close behind.
- Homeowners and renters – a widening gap [Apartment List]
- Los Angeles Millennials Just Aren’t Buying Houses [Curbed LA]
- LA Starter Homes Completely Out of Reach of LA Starter Home Buyers [Curbed LA]
- Mapping Los Angeles’s Lowest-in-the-Country Homeownership [Curbed LA]