Homeownership in California comes later in life than in the rest of the nation, according to a recent analysis by the Public Policy Institute of California.
In California, the age at which half of residents become homeowners is 47, the nonprofit found.
Nationally, that milestone is reached at age 36.
“California’s housing crisis is usually measured in dollars: half-million-dollar starter homes and housing costs that eat up half a paycheck,” the institute said. “But there’s another way to see the crisis—in years. Californians now wait longer to become homeowners than they used to, and longer than people almost anywhere else in the country.”
The Public Policy Institute of California said it used American Community Survey data to track homeownership
rates by age. Here’s what to know about the nonprofit’s analysis.
‘Most working-age Californians are renting’
While homeownership rates rise quickly for young adults in their 20s and 30s across the country, that’s not the case in California, where the increase is “much more modest,” the institute found.
Renters outnumber homeowners throughout Californians' 30s and much of their 40s, according to the nonprofit. Homeowners do not become the majority until Californians are in their late 40s.
“That means most working-age Californians are renting,” the nonprofit said.
Additionally, the age when homeownership becomes the norm has steadily risen over the past 15 years, aligning with “the state’s rising costs of homeownership,” the institute said.
In 2009, the age at which half of residents become homeowners was 39, eight years earlier than today’s age, according to the nonprofit.
“Increases have been less pronounced in the rest of the nation,” the nonprofit noted.
Homeownership also varies by race/ethnicity and education, the analysis found.
White and Asian Californians reach homeownership at younger ages than Black and Latino Californians, reflecting “the state’s long-standing income and wealth gaps across these groups,” the institute said.
Half of Asian Californians own a home by about age 38, compared with age 41 for white Californians, the report found. The age climbs to about 61 for Latino Californians and more than 70 for Black Californians.
A similar pattern emerges with education levels: Californians who earn a bachelor’s degree reach the homeownership milestone years earlier than those with less education.
What analysis means for policy
The rising age of homeownership has implications for wealth building and retirement security, according to the institute.
Because Californians become homeowners over a decade later than residents elsewhere in the country, they have less time to build home equity before retirement, the nonprofit said.
“It also means more Californians are entering their 60s and 70s still paying a mortgage, just as the state’s population is aging rapidly and the ranks of older renters are growing,” the institute said.
This November, the nonprofit said, voters will be asked to decide on a measure, Proposition 37, aimed at “easing down payments for first-time buyers.”
Other policy approaches include expanding the housing supply and providing additional support to residents who face the greatest barriers to homeownership, the institute said. Those efforts are part of a broader conversation about making homeownership more attainable for Californians without the long wait.
This article originally appeared on Palm Springs Desert Sun: Half of Californians don't own homes until age 47, report finds
