Real Estate Talk: Top Five Barriers to Home Ownership
Marty Kovacs is the 2017 Chairman of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. Courtesy photo.
By Marty Kovacs, SCVBJ Contributor
Tuesday, July 18th, 2017

Whatever happened to the commitment of homeownership as a national priority?

Despite the addition of about 11.8 million households between 2006 and 2016, there are roughly 1 million fewer homeowners today than a decade ago.

“The decline and stagnation in the homeownership rate is a trend that’s pointing in the wrong direction, and must be reversed given the many benefits of homeownership to individuals, communities, and the nation’s economy,” said William E. Brown, president of the National Association of Realtors, at a recent day-long Sustainable Homeownership Conference at the University of California, Berkeley.

A white paper commissioned by NAR explored main barriers that prevent people from buying homes. Here are five key findings from that paper, titled: “Hurdles to Homeownership: Understanding the Barriers.”

• Post-Foreclosure Stress Disorder — Among the most vexing challenges is the so-called “post-foreclosure stress disorder,” which continues to have an impact on consumers’ financial decision-making, said Ken Rosen, chair of the Berkeley Hass Real Estate Group.

The psychological effect of jobs and homes lost during the Great Recession remains vivid for many Americans, especially young adults who experienced the hardships their families went through. While most Americans continue to have positive feelings about homeownership, Rosen said targeted programs addressing financial literacy and mortgage financing could help return-buyers and those who still have anxieties and negative biases about owning.

• Restricted Mortgage Availability — Creditworthy buyers are still not getting approved at the rate they were in 2003, prior to the period of excessively lax lending standards. Rules now remain too tight.

• Student Loan Debt Burden — Because of onerous debt, young adults still find it difficult to save money for a down payment, qualify for a mortgage, and afford mortgage payments, especially in pricey areas like the Santa Clarita Valley and other parts of California.

• Single-Family Housing Affordability — Lack of inventory, higher home prices, and investors putting a squeeze on supply levels combine to make homes less affordable.

• Single-Family Housing Supply Shortages — Single-family home construction decreased dramatically during the recession and is still not keeping up with demand.

“The insufficient level of homebuilding has created a cumulative deficit of nearly 3.7 million new homes over the last eight years,” Rosen said.

In order to make homeownership once again an affordable and realistic opportunity for young households, policy changes will be necessary to reduce the growth in college tuition costs, minimize borrowing costs, diminish the incidence of delinquency, and make repayment less burdensome, according to the white paper.

Marty Kovacs is the 2017 Chairman of the Santa Clarita Valley Division of the 9,600-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.

 

About the author

Marty Kovacs

Marty Kovacs, SCVBJ Contributor

Marty Kovacs is the 2017 Chairman of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. Courtesy photo.

Real Estate Talk: Top Five Barriers to Home Ownership

Whatever happened to the commitment of homeownership as a national priority?

Despite the addition of about 11.8 million households between 2006 and 2016, there are roughly 1 million fewer homeowners today than a decade ago.

“The decline and stagnation in the homeownership rate is a trend that’s pointing in the wrong direction, and must be reversed given the many benefits of homeownership to individuals, communities, and the nation’s economy,” said William E. Brown, president of the National Association of Realtors, at a recent day-long Sustainable Homeownership Conference at the University of California, Berkeley.

A white paper commissioned by NAR explored main barriers that prevent people from buying homes. Here are five key findings from that paper, titled: “Hurdles to Homeownership: Understanding the Barriers.”

• Post-Foreclosure Stress Disorder — Among the most vexing challenges is the so-called “post-foreclosure stress disorder,” which continues to have an impact on consumers’ financial decision-making, said Ken Rosen, chair of the Berkeley Hass Real Estate Group.

The psychological effect of jobs and homes lost during the Great Recession remains vivid for many Americans, especially young adults who experienced the hardships their families went through. While most Americans continue to have positive feelings about homeownership, Rosen said targeted programs addressing financial literacy and mortgage financing could help return-buyers and those who still have anxieties and negative biases about owning.

• Restricted Mortgage Availability — Creditworthy buyers are still not getting approved at the rate they were in 2003, prior to the period of excessively lax lending standards. Rules now remain too tight.

• Student Loan Debt Burden — Because of onerous debt, young adults still find it difficult to save money for a down payment, qualify for a mortgage, and afford mortgage payments, especially in pricey areas like the Santa Clarita Valley and other parts of California.

• Single-Family Housing Affordability — Lack of inventory, higher home prices, and investors putting a squeeze on supply levels combine to make homes less affordable.

• Single-Family Housing Supply Shortages — Single-family home construction decreased dramatically during the recession and is still not keeping up with demand.

“The insufficient level of homebuilding has created a cumulative deficit of nearly 3.7 million new homes over the last eight years,” Rosen said.

In order to make homeownership once again an affordable and realistic opportunity for young households, policy changes will be necessary to reduce the growth in college tuition costs, minimize borrowing costs, diminish the incidence of delinquency, and make repayment less burdensome, according to the white paper.

Marty Kovacs is the 2017 Chairman of the Santa Clarita Valley Division of the 9,600-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.

 

Upcoming Events

Jan
12
Fri
all-day Domes – Art Exhibit @ Old Town Newhall Library
Domes – Art Exhibit @ Old Town Newhall Library
Jan 12 – May 11 all-day
Domes - Art Exhibit @ Old Town Newhall Library | Santa Clarita | California | United States
Local resident Naomi Young, is the artist featured in the latest exhibit at the Old Town Newhall Library. The exhibit features original paintings and multimedia by Young, an artist born and raised in Jerusalem, Israel,[...]
Feb
1
Thu
all-day “The Golden Oaks of Santa Clarit... @ Valencia Library
“The Golden Oaks of Santa Clarit... @ Valencia Library
Feb 1 – Jun 1 all-day
“The Golden Oaks of Santa Clarita,” Art Exhibit @ Valencia Library  | Santa Clarita | California | United States
“THE GOLDEN OAKS OF SANTA CLARITA” ART EXHIBIT BY BRAD SERGI ON DISPLAY AT THE VALENCIA LIBRARY Library hours: Mon-Thu 10 a.m. – 9 p.m., Fri 10 a.m. – 6 p.m., Sat 10 a.m. – 5[...]
Feb
14
Wed
all-day Tickets Available Now for 41st A... @ Dodger Stadium
Tickets Available Now for 41st A... @ Dodger Stadium
Feb 14 – May 12 all-day
Tickets Available Now for 41st Annual SCV Dodger Day @ Dodger Stadium | Los Angeles | California | United States
SANTA CLARITA DODGER DAY TICKETS ON SALE NOW! Tickets Start at $25 and Benefit Local Schools and Non-Profits It’s time to step up to the plate! The Santa Clarita City Council invites residents to purchase[...]
Apr
19
Thu
all-day Santa Clarita Cowboy Festival Co... @ Event Locations Vary
Santa Clarita Cowboy Festival Co... @ Event Locations Vary
Apr 19 – Apr 22 all-day
BUY YOUR TICKETS NOW FOR COWBOY FESTIVAL CONCERTS – Locations, Times & Prices Vary 25th Annual Santa Clarita Cowboy Festival offers ticketed performances and special events Get ready for some toe-tapping, two-stepping, guitar-picking musical performances![...]
Apr
20
Fri
all-day Santa Clarita Cowboy Festival Co... @ Event Locations Vary
Santa Clarita Cowboy Festival Co... @ Event Locations Vary
Apr 20 – Apr 23 all-day
BUY YOUR TICKETS NOW FOR COWBOY FESTIVAL CONCERTS – Locations, Times & Prices Vary 25th Annual Santa Clarita Cowboy Festival offers ticketed performances and special events Get ready for some toe-tapping, two-stepping, guitar-picking musical performances![...]
7:00 pm Hart High School Presents ‘Bye, ... @ Hart High school Auditorium
Hart High School Presents ‘Bye, ... @ Hart High school Auditorium
Apr 20 @ 7:00 pm
Hart High School Presents 'Bye, Bye Birdie' @ Hart High school Auditorium | Santa Clarita | California | United States
Spring Musical Coming April 2018! Hart High Theatre is proud to present Bye Bye Birdie! April 19, 20, 27 & 28 @ 7pm April 28 & 29 @ 1pm When the draft selects rock star[...]
Apr
21
Sat
all-day Santa Clarita Cowboy Festival Co... @ Event Locations Vary
Santa Clarita Cowboy Festival Co... @ Event Locations Vary
Apr 21 – Apr 24 all-day
BUY YOUR TICKETS NOW FOR COWBOY FESTIVAL CONCERTS – Locations, Times & Prices Vary 25th Annual Santa Clarita Cowboy Festival offers ticketed performances and special events Get ready for some toe-tapping, two-stepping, guitar-picking musical performances![...]
10:00 am Astronomy Day @ Valencia Library
Astronomy Day @ Valencia Library
Apr 21 @ 10:00 am – 10:00 pm
The Local Group Astronomy Club and The Santa Clarita Public Library present our free annual Astronomy Day Celebration. We will be at the Valencia branch of the Santa Clarita Public Library from 10am to 3pm.[...]
10:00 am Resource Parents Needed to Foste... @ College of the Canyons, Dr. Dianne G. Van Hook University Center, Room 222
Resource Parents Needed to Foste... @ College of the Canyons, Dr. Dianne G. Van Hook University Center, Room 222
Apr 21 @ 10:00 am – 12:00 pm
Resource Parents Needed to Foster or Foster-Adopt a Child @ College of the Canyons, Dr. Dianne G. Van Hook University Center, Room 222 | Santa Clarita | California | United States
Adoption is a meaningful way for individuals and couples to fulfill their dream of parenting.  There are approximately 64,000 children in foster care in California.  Los Angeles County’s foster care population exceeds 21,000 children with[...]
10:00 am The City of Lancaster’s 27th Ann... @ Sgt. Steve Owen Memorial Park
The City of Lancaster’s 27th Ann... @ Sgt. Steve Owen Memorial Park
Apr 21 @ 10:00 am – 6:00 pm
The City of Lancaster’s 27th Annual California Poppy Festival, Sat & Sun @ Sgt. Steve Owen Memorial Park | Lancaster | California | United States
On April 21 and 22, the City of Lancaster will host the 27th annual California Poppy Festival™ at Sgt. Steve Owen Memorial Park (43063 10th Street West). Drawing more than 40,000 attendees and spanning 35[...]