Challenges Faced by First-Time Homebuyers in Los Angeles

The dream of owning a home for first-time buyers in California has become increasingly challenging, with the biggest hurdle being the down payment. Real estate agent Sarah Moore expressed frustration over first-time buyers being outbid by cash buyers due to lack of down payment funds.

Recent data shows that only 34% of potential first-time buyers can afford a home in California. To address this issue, the California Housing Finance Agency (CalHFA) launched a loan assistance program called “Dream for All,” with $300 million allocated to help first-time buyers with their down payment. However, the funds were quickly depleted in just 11 days.

According to Zillow data, home values in California have quadrupled since 2000, with the median sale price in Los Angeles and Orange counties reaching $835,000. The Inland Empire is relatively more affordable at $511,000, but still up 46%.

Eric Johnson, a spokesman for CalHFA, stated that all the funds have been committed, with approximately 2,500 people expected to become homeowners once the loans close. With low inventory and rising interest rates, the housing market faces additional pressure.

Moore emphasized that the housing shortage is a national issue, with demand far exceeding supply. The California Legislature is currently working on next year’s budget, and officials are hopeful that the loan assistance program will receive more funding to support first-time buyers in their quest for homeownership.