Reduced number of residents in California can afford to purchase a home
Rising home prices in the Bay Area are making it increasingly challenging for Californians to afford a home, and a recent study reveals a corresponding increase in the average age at which individuals in the state can finally purchase a home.
Ruben Montes, a 37-year-old registered nurse, and his fiancée have been attempting to buy a home in the Bay Area for the past two years. Despite their well-paying jobs, they have faced challenges in finding a house within their budget. The struggle to secure a home has become a common experience for many young individuals in California, with the study indicating that most people are approaching the age of 50 before they can realistically afford to own a home.
Montes shared the emotional toll of the house-hunting process, describing the ups and downs of finding a property, falling in love with it, placing an offer, and ultimately being outbid. The study, conducted by the UC Berkeley Terner Center for Housing Innovation, highlights the growing trend of homeownership becoming increasingly unattainable for a significant portion of the California population.
In 2021, the homeownership rate in California was below 45%, and the majority of individuals in their 30s could afford to purchase a house in most other states. However, a study reveals that, in California, most residents are unable to afford homeownership until the age of 49.
Issi Romem, co-author of the study and a housing economist, expressed concern over the implications of these findings. He emphasized that the delay in homeownership means individuals may miss out on enjoying the benefits of owning a home for their children. Romem underscored the need for California to construct more dense and affordable housing to avoid significant demographic shifts.
Romem highlighted a sorting process over time, where only more affluent individuals can afford to live in the state. This, he argues, contributes to the wealth disparity observed among Californians compared to other regions.
Realtor Valerie Vicente from Coldwell Banker Realty noted the increasing difficulty for young people to enter the housing market, with even fixer-uppers reaching million-dollar price tags. Vicente expressed frustration on behalf of young, hard-working couples who, despite both partners working, struggle to save enough for a down payment.
Ruben Montes and his fiancé, aiming to overcome these challenges, have made sacrifices, including living with a relative to save for a down payment. They recently placed an offer on a $1.1 million property, illustrating the significant hurdles young individuals face in realizing the American dream of homeownership in California. Despite the difficulties, Montes remains determined to own a home, ideally before reaching the age of 49.