Understanding California’s Home-Equity Millionaires: Who They Are and How They Reflect the State’s Past and Present

Title: California Home Equity Millionaires: Who They Are and What It Means for the State

In California, the housing market has created a new class of homeowners known as “home equity millionaires.” These individuals have seen their home values skyrocket, leading to record amounts of equity in their properties. With over 1.2 million households now considered home-equity millionaires, it raises questions about who these individuals are and what implications their wealth has for the state.

Most of these high-equity homeowners have paid off their mortgages, with 58% owning their homes free and clear. This trend reflects a rise in the number of Californians who have paid off their mortgages over the years, indicating the importance of long-term homeownership in building wealth. Many of these homeowners have lived in their homes for decades, with about half residing in their current home for more than 20 years.

Demographically, high-equity homeowners tend to be older, with the most common age group being 65-69. They are also more likely to be white or Asian, highlighting disparities in homeownership among different racial groups. This reflects broader issues of income and educational inequality in California.

While high-equity homeowners with no mortgage tend to be more educated and have higher incomes than renters, they are less educated and have lower incomes than those with a mortgage. This disparity is partly due to the age of these homeowners, many of whom bought their homes decades ago when college enrollment was less common.

The majority of California’s high-equity homeowners reside in coastal metropolitan counties, particularly in the Bay Area and coastal Southern California. Despite higher homeownership rates in inland metropolitan and rural areas, those with the highest equity tend to live in expensive coastal areas.

The rise of home equity millionaires underscores the importance of homeownership in building wealth in California. However, high housing costs are limiting young adults’ access to this wealth-building opportunity. Efforts to improve homeownership among young adults, such as building more affordable housing and providing assistance for first-time buyers, are crucial in addressing the state’s housing crisis.

As California continues to grapple with housing affordability issues, understanding the demographics and implications of home equity millionaires will be essential in shaping future housing policies and solutions.