Californian renters want to be homeowners but can they afford to?

by Steve Randall03 Dec 2018

Despite the super-high costs of homes in some of the state’s markets, Californian renters are not losing sight of homeownership.

A survey by the California Association of Realtors shows that the dream of owning a home is still very much alive with 21% saying they consider homeownership to be a good long-term investment.

Among other key reasons for wanting to be homeowners, 19% said it is the freedom to choose what to do with their home and 12% cited the stability to put down roots.

“It’s encouraging that the majority of renters still believe buying a home is more than just a shelter over their heads,” said C.A.R. President Jared Martin. “While they may not be there yet, many renters are motivated to become homeowners as they recognize the many benefits.”

The top motivators for buying a home are getting a new job, raise, or promotion (45%) or getting married or starting a family (40%).

But can they afford it?
While the passion is there to convert from renting to owning a home, many Californians just can’t afford to – or at least think they can’t.

Only four in 10 renters are familiar with the credit and loan criteria needed to purchase a home; while 14% think they will need more than a 50% down payment almost 40% believing that more than 20% is required to become a homeowner.

The survey found that young renters are spending half their income on rent while the general population is spending 45% on rents such as a median $1,800 in the Bay Area and $1,390 in Southern California.

 


More market update:

Poll

Should CFPB have more supervision over credit agencies?