As mortgage rates fall, 250K more SoCal households can afford starter homes

Even with cheaper mortgages, homeownership is out of reach for most

TRD LOS ANGELES /
Jul.July 26, 2019 09:00 AM
John Burns (Credit: iStock)
John Burns (Credit: iStock)

A new study shows affordability in the single-family markets in Southern California increased and about 257,000 more people can buy a starter home thanks to cheaper mortgage rates — but that doesn’t help the majority.

The study by John Burns Real Estate Consulting found that the number of qualified local residential buyers rose by 15 percent since last November in Los Angeles, Orange, Riverside and San Bernardino counties, according to a report by the Orange County Register. That’s after 30-year fixed-rate mortgages dropped from nearly 5 percent to about 3.8 percent.

The report looked at households with incomes that could comfortably buy a residence at 80 percent of the local median-priced home, which is a standard for starter homes. But even with the cheaper mortgages, home sales have persistently been slowing for nearly a year, and only one third of households in Southern California can afford a starter home.

The cheaper mortgages added about 129,000 more households in Los Angeles County that can now theoretically buy a starter house compared to last November. That’s the fourth lowest affordability rate on the list of 131 major U.S. markets. Just about 27 percent of households can afford 80 percent of the local median-priced home. About 48,250 more households can afford homes in Orange County, where still just 29 percent of households can afford a starter home.

San Francisco still reigns as the least affordable city, where just 11 percent can afford a starter home. [OC Register]Gregory Cornfield


Related Articles

arrow_forward_ios
Scott Laurie, chief executive of Olson Co. and Christopher Thornberg, founding partner of Beacon Economics

How slow can you go? Statewide homebuilders tap brakes on new projects amid rising costs

Gavin Newsom

Statewide rent control inches closer to a reality with Gov. Newsom endorsement

CoreLogic analyst Andrew LePage

LA home sale prices just set another record high

Southland Regional Association of Realtors President Dan Tresierras and the San Fernando Valley (Credit: Wikipedia)

San Fernando Valley might be selling homes slowly, but prices just won’t stop rising

(Credit: iStock)

In LA’s affordable housing crisis, there is room for the “vanlord”

CoreLogic Research Analyst Andrew LePage

Peak LA: Home prices tie all-time high, but fewer properties sell

Andy Reid, the President of MetroStudy

The great SoCal slowdown: Homebuilding drops 18%

Reports on Housing founder Steven Thomas

Homes flood the SoCal market, but buyers aren’t biting

arrow_forward_ios
Loading...