The number of renters is growing three times faster than homeowners as would-be homebuyers increasingly are priced out of the market.
Cameron and Karie Herber have two incomes, good credit and successful careers. But the Riverside couple still can’t find a house they can afford to buy.
So they plan to buy some land and build their own home — in Idaho.
“These (Southern California) properties are out of our range. … There’s nothing we can afford,” said Karie Herber, 44, a nurse and mother of two with a dog named Vader. “We’ve now come to terms that we might have to move to Idaho.”
“We made a conscious decision we’re not going to be house poor to own a house,” added her husband, 45, a driller for an environmental firm. “It’s not affordable to own a home anymore.”
The Herbers are among thousands of would-be Southern California homebuyers who are being priced out of the market due to a limited number of homes for sale and relentlessly rising home prices.
In the seven years since the housing crash ended, home values in more than three-quarters of U.S. metro areas have climbed faster than incomes, data compiled by The Associated Press shows. The news service paired the Case-Shiller Home Price Index from more than 425 U.S. metro areas with wage index data from the U.S. Bureau of Labor Statistics. The numbers show:
- Home prices increased four times faster than wages in Los Angeles and Orange counties from the summer of 2011 through the summer of 2018.
- While incomes rose 17% in L.A. County, house prices rose 73%.
- Incomes rose 15% in Orange County, compared with a 58% jump in house prices.
- Inland Empire wages increased 14% in the seven-year period, while prices jumped 80% — a six-fold jump
- By comparison, U.S. wages increased 15%, while prices rose 45%.
- Historically low mortgage rates cushioned the blow from rapidly escalating home prices somewhat. Nonetheless, the typical mortgage payment still jumped 73% in L.A. and Orange counties over the past seven years, while incomes increased no more than 17%. In the Inland Empire, mortgage payments rose 85% vs. a 14% rise in pay.
