New data from the U.S. Census Bureau shows the rate of homeownership in the Los Angeles metro area (which includes LA and Orange counties) rose considerably in the first few months of the year—enough that homeowners may once again outnumber renters in the region.
Statistics from the first quarter of 2017 indicate that 50.1 percent of homes in the area are owned by the residents who live in them. That’s the first time the region’s homeownership rate has eclipsed 50 percent since the first quarter of 2015, census data shows.
The margin of error on that figure point is 2.8 percent, so it’s possible renters still constitute a slim majority of residents in the area. But the number of homeowners has grown considerably since the third quarter of 2016, when only 44.7 percent of homes were owner-occupied.
Strong sales in recent months may have helped spur the increase. A recent report from CoreLogic indicated that the number of homes sold in LA County during the month of March was nearly 10 percent higher than the amount sold in March of 2016.
The same report also revealed that the median home price in the LA metro area has swelled to $480,000—the highest level since the Recession. Even as the prospect of new interest rate hikes drives buyers to the market, those rising prices could convince some home shoppers to stay on their lease.
In spite of the recent upswing, LA’s homeownership rate is still one of the lowest in the nation. Of the country’s 75 largest metro areas, only New York and San Jose have a higher percentage of renters.
Another report by ABODO Apartments shows that L.A. minorities are owning homes at a rate of 41.6 percent while minorities in the Los Angeles area are renting at a clip of 58.4 percent. Many experts have suggested that non-traditional financing is a big reason that many minority owners are finally getting the homes they deserve. For example, in Minnesota, minorities are utilizing a “contract for deed financing method” to get financed. And others across the country are starting to do more “rent to own” financing agreements.
It will be interesting to see how the housing market reacts to this trend throughout the entirety of 2018.