California renters face hurdles to homeownership

california home photoThis Laurel Canyon home in Los Angeles was listed on Zillow for $979,000

A poll by the California Association of Realtors (CAR) shows nearly half of renters in the state aspire to become homeowners at some point. But many say they have a lot of financial issues to deal with first.

Forty-eight percent of renters say they plan to buy a home in the future, with 10% expecting to do so within the next 12 months. For those not planning to buy, an improvement in finances, lower housing prices, and saving enough for a downpayment would motivate them to buy now.

Of the renters who say they don’t plan to buy in the future, about half said they can’t afford it. Only 20% said they’d rather rent. Not qualifying for a mortgage, lack of down payment, and job uncertainty were the main reasons for putting off a purchase.

There were a few surprises in the results. For example, more than one in four Millennial renters said they plan to purchase a home that will accommodate their parents, and about one in five Millennials said they plan to pool funds with family members to buy a home.

Two out of three renters said they have made some kind of preparation to buy a home: either searching for homes, or going online to find information about the process. Twelve percent said they had already discussed it with a real estate agent.

Perhaps reflecting recent economic turmoil, 31% of renters in California said they previously owned a primary residence, and 9% currently own some kind of real estate. The reasons for selling their previous home included family reasons, financial difficulties, and relocating for work.

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