Los Angeles may be a city of dreams, but it’s not certainly not a city of homeowners, despite today’s low interest rates and high costs of renting.
The city’s homeownership rate is the lowest in the country at 47.8 percent — that’s 4.5 percentage points lower than when the recession began, according to a new report cited by Curbed.
Ownership rates have declined even more dramatically among African American and Hispanic communities and remain low for anyone under the age of 45 — especially millennials. The national rate of adult homeowners under the age of 35 is less than 40 percent.
Experts attributed the low rates in part to the fact that renting, regardless of its rising costs, is still much more affordable in L.A. than making mortgage payments. Curbed cited another study from Trulia that found that median first-time homebuyers spend more than 88 percent of their income in order to keep up bills on a starter home.
Last month, Bloomberg named L.A. the most unaffordable metropolitan area for newbie homebuyers because it has the most pronounced disparity between median income and the minimum earnings needed to buy a single-family home. [Curbed] — Cathaleen Chen