Despite a median Los Angeles home value of $632,000, a new generation of home buyers has entered the Los Angeles housing market. Millennials are taking their earning power and buying homes.
It’s been a struggle for many.
The rate of first-time home buyers is still historically low, but it’s picking up, finally.
Nationally, first-time home buyers purchased 35% of previously owned houses and condos sold in the 12 months that ended in June 2016 — the latest data available — up from a near-record low of 32% in the previous 12-month period.
Still, that rate is well below the historical average of 40% over the last several decades, reflecting continuing obstacles, such as heavy personal debt loads and high home prices, that are preventing more young people from buying homes.
Source: Los Angeles Times
California still hasn’t caught up to the rest of the country, though. In the last quarter, 31.7 percent of home sales were to first-time buyers, but that’s up almost 10 percent from just a year ago.
Higher coastal prices are forcing some to move inland, often with long commutes. The further people move from Los Angeles, the more affordable homes become. Builders are following the demand.
In San Bernardino and Riverside counties, builders pulled permits for 9,269 new homes, most of which were houses, in the first seven months of this year, up 58% from a year earlier, according to data from the Census Bureau.
In more expensive Los Angeles and Orange counties, permits were down a combined 4%, a drop that came entirely from multifamily construction, which is typically built in expensive urban areas and faces more pushback from existing residents.
For people in the coastal areas, you can probably expect even higher home prices as high-paid millennials and those with parental help enter the market, driving down inventory and driving up home values.
Featured image via Mark Moz/Flickr.