Home affordability is still the biggest barrier to homeownership in California. A recent survey of renters by the California Association of Realtors shows 46% of renters can't afford to buy a home, while 13% cannot qualify for a mortgage loan due to poor credit. The rest? Well, they do not want to buy due to concerns about the maintenance costs of owning a home, or they are simply not ready to buy or are not interested.
Despite the fact that California home prices keep majority of renters from buying a home, an overwhelming majority (95%) see the many advantages and benefits of homeownership such as freedom to do what they want with their home, building equity, and permanence and stability. In fact, 48% who can't afford to buy a home now, said lower housing prices and an improvement in their finances would motivate them to buy.
Here are some of the highlights of C.A.R.'s 2016 Renter Survey:
- Forty-six percent of renters claimed they currently rent because they can’t afford to buy, and 13 percent said they have poor credit and can’t qualify for a loan. The remaining renters choose to rent because they like the flexibility, freedom and ease of renting, are concerned about the maintenance costs of owning a home, or are not interested or aren’t ready to buy.
- Nearly four in 10 renters (39 percent) indicated they plan to purchase a home in the same county where they currently reside, and 23 percent plan to buy in the same neighborhood.
- Fifteen percent of renters plan to buy a home out of their current area, with 7 percent planning to move to another state, 7 percent to another county in California, and 1 percent to another country.
- Of the renters who are planning to leave the area where they currently reside, 27 percent are moving to find lower housing prices, 24 percent are moving for a better neighborhood, 14 percent want to be closer to family, 9 percent want a shorter commute, and 7 percent are moving for a better school district.
- Two in three renters have made some kind of preparation to buy a home: 25 percent have searched for homes, 16 percent have searched online for information about the homebuying process, and 12 percent have spoken to a REALTOR®.
- Thirty-one percent of renters previously owned a primary residence, and 9 percent currently own real estate. Of those who previously owned a home, the reasons for selling included family reasons (37 percent), financial difficulties (28 percent), and work (13 percent).
Click on the link below for the full report.
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