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California Renters Qualify for Homeownership, Lack Financial Knowledge
Low affordability is the biggest obstacle most California renters face in becoming homeowners, yet the lack of knowledge about how to go about buying a home is forcing them to forego the decision. Research findings by the California Association of Realtors (C.A.R.) show 14% of California renters can afford to purchase a home, but aren’t.
C.A.R.’s Jared Martin says, “While many renters earn the income and have the credit required to buy a home, they have misconceptions about what it takes to become a homeowner, which is holding them back from buying a home or causing them to give up on their American dream.”
C.A.R. notes, of the nearly six million California renters statewide, 826,000 could qualify to purchase a median-priced home in the county in which they reside. Five in 10 who qualify to purchase a home are white (51.4%), 12% are Asian, more than one in four is Hispanic (26.9%), and 6% are black.
A lack of financial literacy is one of the biggest barriers preventing renters from becoming homeowners. Nearly three-fourths (73%) believe a down payment of at least 20% is required to purchase a home, and 72% are unaware of loan programs that require less than 20% down payment. Additionally, nearly seven in 10 (69%) would purchase a home if they could put down a lower down payment.
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