Homeownership Dreams Fading for Renters in Orange County

The American Dream of homeownership is rapidly slipping away for many renters in Orange County and nationwide. According to a recent survey conducted by the Federal Reserve Bank of New York, only four in ten renters believe they will be able to buy a home, marking the lowest level since the survey's inception a decade ago.

The situation is bleak for younger renters under 50, with a staggering half expressing doubts about achieving homeownership. In the Northeast region, the share of renters who think they have a chance of buying a home has plummeted from 51% to a mere 26% within the past year.

The primary culprits behind this disheartening trend are:

• The escalating housing costs.
• Soaring mortgage rates.
• The uphill battle of saving for a substantial down payment.

The survey findings reveal that expectations for rent increases have surged sharply, with renters anticipating an average hike of 9.7% over the next year, reversing last year's decline.

Furthermore, the outlook for mortgage rates is equally discouraging, with households expecting rates to reach a staggering 8.7% within a year and climb to 9.7% within three years – levels unseen since the early 1990s. Compounding the challenge, nearly three-quarters of renters now perceive obtaining a mortgage as "somewhat or very difficult," a substantial increase from pre-pandemic levels when only about half shared that sentiment.

The survey also highlights the diminishing residential mobility among homeowners, with average expectations of moving to a different primary residence hitting new lows at the one-year (13.4%) and three-year (24.5%) horizons, reflecting an ongoing trend of reduced mobility.

Despite the gloomy outlook, hope remains for those aspiring to own a home in Orange County. While the path may be arduous, proactive measures such as diligent saving, exploring alternative financing options, and seeking expert guidance can help navigate the challenging housing market.

Bottom Line

If you are among those dreaming of owning a home in Orange County, don't lose hope. No matter how daunting the obstacles appear, chances for achievement exist for individuals who refuse to give up. Let's connect and explore strategies to make your homeownership dreams a reality in this vibrant community.

Reference: “Renters see chance of owning a home at record low, survey shows” by Alex Tanzi | Bloomberg. Published on May 06, 2024.