Young adults aged 25 to 34 make up about 11% of homeowners in the Los Angeles metro area, the fewest for that demographic in the U.S., according to a new survey from ApartmentList.
ApartmentList, a rental marketplace that also conducts research, based its findings on homeownership data from the Census Bureau’s Current Population Survey.
The May 12 study found that other California metropolitan areas are just slightly ahead, with San Francisco and San Jose at 14%, San Diego at 15%, Riverside at 19% and Sacramento at 23%.
Instead of buying, the survey says, these younger adults are choosing to either rent for longer or live with family or friends.
Edward Coulson, an economics professor at UC Irvine’s Paul Merage School of Business, attributes the low numbers to the region’s expensive home prices and down payment challenges. The metro area includes Orange and Los Angeles counties.
See more: Mapped: 7 ways California’s economy differs from other states
“It takes a lot to be able to put together a down payment, and that’s increasingly difficult for young people who don’t have a third party able to help,” Coulson said.
The young adult homeownership rate in the two-county metro is 10.5%. In LA County specifically, it’s 9.8%. In Orange County, it’s 13.2%.
With interest rates and inflation adding to costs, more housing inventory is one solution to abate barriers to ownership, Coulson added.
Across the region, home prices have dipped in recent months, even as they remain near record highs. Los Angeles County’s median $882,875 was down 2% in February, the latest full month of sales data available. In Orange County, the median also was down 2% to $1.18 million.
Median rents across California average $2,759 per month, compared with $1,910 nationally.
See more: Here’s a curious way to say ‘California homes are wildly expensive’
Candice Blair, a real estate broker in south Orange County who has represented home sellers in the area for more than 20 years, says she’s noticed a stark change in the buyer pool.
“The people who have closed on offers have gotten their deposit with help from family members or at least had it significantly supplemented by family members,” she said.
Out of almost 50 home sales last year, she closed five for first-time buyers in the young-adult age group with help from family and state grants with the California Housing Finance Agency.
See more: Southern California condo prices fall 6%, biggest drop in 14 years
Blair also manages 250 rental properties, which have seen a rising number of younger tenants in recent years.
“These poor potential first-time buyers are feeling the squeeze on the renting and the buying. That’s the problem with our affordability,” Blair said.