In Los Angeles County, only 17% of people have the annual income needed to purchase a home in 2022, according to the California Association of Realtors; however, once split into racial and ethnic groups, this number becomes even more glaring.
Over one-third of white L.A. households can afford a median-priced home, while only 15% of Latinx and 14% of Black households can afford that same median-priced home.
According to a report done by the California Association of Realtors, “The significant difference in housing affordability for Black and Hispanic/Latino households illustrates the homeownership gap and wealth disparity for communities of color, which could worsen as the economy slows and rates remain elevated in 2023.”
Andrea Garcia, who currently rents in Downtown L.A., is Native American and Mexican. She believes that it is harder for people of color to achieve home ownership.
“I think it’s just because, statistically, people of color have had to work a little harder to earn their wages, and it’s just harder for them to be moving up in management positions,” Garcia said.
The report said that in the past year, the number of Californians who earn the minimum income needed to purchase a median-priced home has dropped 6%. This drop has most heavily affected Black and Hispanic/Latino households, where only 12% could afford the same median-priced home in 2022.
“[The decrease in housing affordability] has to do with rising interest rates causing people’s monthly mortgage payments to go up,” said John Loper, associate professor of real estate at USC Price. “What you can afford is based on what your mortgage payment is in relationship to your income.”
Like many Angelenos, Garcia doubts that she’ll ever be able to own her own house.
“I have not owned a home, and I don’t think in this economy that I will be able to own a home anytime soon,” Garcia said. “Maybe in retirement age, but with the way that the economy is looking, I don’t think it’s possible.”
Kenneth Chavarria, who identifies as Hispanic, said that he has lived in L.A. his whole life and that while he currently rents, he remains hopeful that he will be able to buy his own house in the future.
“What I’m waiting for right now is for the recession to end,” Chavarria said. “In the recession, the housing goes down so I can take the opportunity and buy a house.”
Other Angelenos have had different experiences. Mark Patton, who has been a resident of South L.A. for fifty years, said that although he has previously rented in the area, he has owned his own home since 2015. He said that it was not difficult for him to achieve that goal — it was simply a matter of saving money.
However, the median housing price in South L.A. is nearly double the national median, while the median household income is less than half of the nation’s.
According to Redfin the median housing price in South L.A. is $695,000, while the national median is $386,797. The median household income in South L.A. is $49,903 compared to $76,367 in L.A. County as a whole, according to Point2 and the Census Bureau.
Patton, who is African American, believes that the struggle to achieve home ownership has more to do with age than race.
“I’ve never had a problem personally … I think it’s harder for young folks than people of color,” Patton said.
People under the age of 35 makeup 9.9% of homeowners and 34.4% of renters in the nation, according to Pew Research Center.
Twenty-year-old Chavarria feels similar to Patton.
“I never had a problem with that. I mean, there is racial profiling, and this is a problem,” Chavarria said. “But if you have the money to buy a house, just buy, you know what I mean?”
Racial disparities remain. In an effort to combat the growing housing affordability crisis in California and the divide in racial homeownership, CAR is collaborating with nonprofit housing organizations to supply up to $10,000 in closing cost grants for first-time home buyers in underserved communities.
The previous skyrocketing mortgage rates in California have resulted in a huge population decline: L.A., the largest county in the United States, had the biggest drop in population in the nation last year.