Prospective home buyers face many challenges when it comes to achieving the American dream of homeownership. Obstacles to purchasing a home vary among ethnic groups, according to a poll conducted by the Futures Company in partnership with the California Association of Realtors Center for California Real Estate.
For all respondents, saving enough for a down payment is the biggest barrier to becoming a homeowner, cited by nearly one in three (29 percent) prospective home buyers, followed by housing supply constraints (27 percent), access to credit and financing (22 percent), and personal debt (19 percent).
These hurdles vary across race and ethnicity. Thirty-one percent of non-Hispanic whites said constrained housing supply was the most likely deterrent to becoming a homeowner, while a third of Hispanics cited access to credit and financing as their primary challenge in buying a home. African-Americans (33 percent) and Asians (32 percent) both cited a lack of down payment or savings as the main prohibitive factor in purchasing a home.
Across all incomes, races/ethnicities, and generations, respondents overwhelmingly agreed on the positive impact of homeownership on their personal satisfaction and health. Eighty-four percent of respondents said owning their own home gives them a greater sense of well-being and control over their environment.
In connecting housing to opportunity, nearly three in four (72 percent) agreed that owning a home is part of their retirement strategy, believing that homeownership is a tool for long-term financial security among those who plan to buy a home or currently own one.
"Homeownership gives families the opportunity to create a lifestyle, build equity and provides them with a stable and safe environment," said Karen Trolan, president of the Silicon Valley Association of Realtors. "Unfortunately, the supply of housing hasn't kept up with the huge demand from first-time buyers and homeowners looking to move up. While prices on the high- end have tempered, prices of homes in the affordability level remain competitive."
Trolan said in this competitive housing market, it is important for prospective buyers to select a Realtor who can guide them through the process. "Especially because the market is so competitive at the entry level, buyers have to be prepared and move quickly. Buyers should avoid the temptation to buy a home that does not suit their needs. A Realtor can objectively guide buyers through the home search and help them select a home that's right for them and within their budget. Plus a Realtor will help them get through the process and close escrow on the home smoothly," said Trolan.
Lastly, the real estate survey shows consumers want policymakers to take active steps in expanding homeownership. Nearly three-fourths (70 percent) of survey respondents who plan to buy a home agreed that they would like the current presidential candidates to address how to make housing more affordable in their campaigns. Across all incomes, generations, and races/ethnicities, consumers were strongly in agreement that housing affordability should be a top priority on the presidential campaign trail as candidates make their pitches for ballots in the lead-up to the November contest.
"I'm disappointed to report that there's not much about housing on either side. There's nothing that we can hang our hat on that has been released yet," California Association of Realtors vice president and chief economist Leslie Appleton-Young remarked at the state Realtor group's 2016 midyear housing outlook webinar.
Other than releasing plans to increase the five-decades-low homeownership rate, presidential nominees Democrat Hillary Clinton and Republican Donald Trump have not issued comprehensive housing policies, including action items to address the significant housing affordability crisis.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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