54% Fewer Homes on the Market
By Kurt Real Estate Feb 5, 2021
How hard is it for a first-time house hunter to succeed in the Golden State?
Well, five metros in California topped the list of the areas most out of reach;
Los Angeles-Orange County are 12.1 times the median first-time buyer income.
Followed by San Diego (8.6),
San Jose (7.9),
San Francisco (7.4)
NerdWallet’s third quarterly report analyzing affordability for first-time buyers shows no signs of relief for those trying to get into a market that continues to be defined by unusually low inventory and a lack of “affordability.”
Across the 50 most populous metro areas, the number of homes hitting the market means that sellers could continue to price high in the third quarter, with no cooling-off insight.
Finding a home listed at three times a buyer’s monthly income — a long-standing gauge of home affordability — continues to prove difficult for first-time buyers.
Median list prices remained about 5.2 times first-time homebuyer income in July through September.
Though 36 percent of home purchases in April were made by first-time buyers, that fell to 31 percent in September, according to NAR.
This year’s record-low mortgage rates have been persuading well-qualified, experienced buyers to brave this highly competitive housing market, even amid a global pandemic.
But for many first-time homebuyers — who typically have less of a credit track record, smaller down payments and less flexible budgets — the third quarter of this year likely looked daunting.
On average, U.S. list prices rose 3 percent in the summer quarter from the spring. But home prices rose later than usual this year, due to the pandemic hitting right when traditional “homebuying season” would be getting underway.
Prices in L.A.-O.C. and the Inland Empire rose 7 percent.
Nothing to Buy
Not only are the homes available often listed at higher prices than many first-time buyers can afford, but there are very few options available.
Active listings in the most populous metros were down 38 percent in the third quarter compared with last year at this time, and down 13 percent from the previous quarter.
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