Starter Homes Are Out of Reach And Higher Housing Prices Aren't Helping
Starter homes in LA are few and far between, according to a recent report released by Trulia.
First-time buyers are having an increasingly difficult time buying homes in LA, Zillow chief economist Svenja Gudell tells Bisnow.
Renters now spend half of their monthly incomes on rent, according to Svenja. As a result, attempting to save for a down payment can be nearly impossible, she says.
Home prices are on the rise, "bumping up the amount buyers need to put down," Svenja tells us.
In LA as well as Orange County, home prices have gone up 6.9% from a year ago with home prices in the US rising at more than double the rate of incomes in January, according to the LA Times.
The median home value in metro LA is around $560k. Svenja says assuming a 20% down payment, a potential buyer would have to come up with more than $100k just to move into a home.
The options for first-time buyers on budgets are limited since inventory is low, something also making it difficult for homeowners looking to upgrade to a bigger house, according to Svenja.
However, many Millennials still want to buy a home because they "associate it with the American Dream, they’re just waiting a bit longer to do so," Svenja says. [LAT]
