News of California’s housing shortage has become as common as reports about traffic on the 5 freeway but according to recent data from Fannie Mae, there’s more to the story that may be of interest to homebuyers in the state. Apparently, even with a small increase in new home construction over the last year, very few of these new properties are designed for first-time buyers on a limited budget.
According to First Tuesday Journal, in the 1970s, 34 percent of new homes constructed were considered starter homes, or homes smaller than 1,400 square feet. This increased to 40 percent in 1980. Today, it is a mere seven percent. This presents a tremendous problem for Millennials who currently make up the largest share of first-time home buyers.
Overall, California’s housing supply is at a 5.7 percent deficit or 820,000 units, according to Freddie Mac.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.0 percent and 15-year rates are near 2.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (877) 700-0942 and your questions may be featured in an upcoming article.