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

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

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
The L.A. County median of $790,000 was 23 percent higher than last June (Getty)
SoCal home prices reach yet another record high in June
SoCal home prices reach yet another record high in June
Prices may be pushed up by a lack of inventory (Getty)
SoCal home prices hit another record high in May
SoCal home prices hit another record high in May
(iStock)
SoCal home sales kept rising in April
SoCal home sales kept rising in April
Fewer homes are selling across Southern California, but low supply helped push pricing up across the region.
Far fewer SoCal homes traded in April, but prices rose
Far fewer SoCal homes traded in April, but prices rose
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
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
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
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
San Fernando Valley might be selling homes slowly, but prices just won’t stop rising
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...