Study says Southern California is one of the worst place for first-time homebuyers
While the Golden State's thriving housing market may still make a good investment, a recent study shows that the American Dream is becoming less attainable for people in Southern California.
"That's what kind of worries me," said prospective homebuyer Jackie Merry. "Actually falling in love with someplace and not being able to actually get it."
The American Dream seems to be getting harder and harder for prospective homebuyers as the "for sale" signs seem to be diminishing in Southern California as owners are less inclined to sell amid the high-interest rates. According to a new study from the website Bankrate, Southern California is one of the worst places for first-time homebuyers.
"We had home prices soaring to record highs and wages not really keeping up," said Bankrate analyst Jeff Ostrowski. "Then for first-time homebuyers, it's very difficult because they have to come up with more for a down payment."
Despite the difficulties, lenders said that buying your first home in one of the most expensive places in the world is still possible.
"People may be able to get into a home sooner than they think," said mortgage banker Larry Davis.
Davis, who works with Prime Lending, said that there are plenty of first-time homebuyer programs where the down payment is waived.
Last week, California launched a new program called "Dream For All" where the state will pay your 20% down payment in exchange for 20% equity in your home, payable when you sell or refinance.
"It's going to open up a lot of doors for potential buyers especially first-time homebuyers and that income limit is up in L.A. County to $180,000," said Davis.
For Orange County, the highest qualifying household income sits at $235,000.
"It's a great win for the buyer because they're still going to get 80% of the appreciation," said Davis. "As a homeowner, it gets them into the home with no down payment."
If you can supply a little cash for a down payment, there's still more money available from the California Housing Finance Agency. Qualifying applicants will receive up to 3.5% of their down payment through CalHFA.
"Everyone can buy a home, it's just a matter of when," said Davis.
For prospective homebuyers, experts recommend you talk to a lender first. With the limited inventory, it's also important to get a pre-approved loan and of course, know how much you can afford.
