A new report concludes that Greater Los Angeles has fewer homeowners per capita than any other major American metro area.
The “homeownership” rate in L.A. is 38 percent, lower than San Diego (41.6), New York (42.8), Las Vegas (43.4) and San Francisco (43.9), according to Apartment List's recently released “Racial Divide in Homeownership” report. California represents.
“Lack of affordability is definitely a big factor here,” says Chris Salviati, a housing economist for the site. “It's a trend we're seeing across the country right now. There's a huge shortage of affordable entry-level homes for sale. “
One caveat is that the data applies to what Apartment List defines as “prime working-age” Americans, those 25 to 54, Salviati says. Still, those folks are also prime homeowner age. Price, demand and availability means that not enough of those people in Greater L.A., which includes Orange County, are getting into their own real estate. And that's bad for economic mobility.
“Homeownership is a wealth creator,” Salviati says. “When you own a home, the home people live in is, in most cases, their largest asset. By not being able to obtain homeownership — that drives inequality.”
Los Angeles, home to the $350 million real estate listing, is an American capital of inequality. But, according to Apartment List, that gap doesn't apply to race and ethnicity as egregiously as it does in other big cities. L.A. has the ninth smallest homeownership disparity between races and ethnicities when compared with the nation's 49 other largest metros.
And it's the third most diverse area for working-age households, the analysis found. Only San Francisco and Houston were found to be more diverse.
The big percentage of homeowners of Asian descent helped L.A. post good figures when it comes to the racial divide in real estate. According to the report:
“The homeowership rate in Los Angeles is 44.4 percent for white households, compared to 21.4 percent for black households, 30.6 percent for Hispanic households and 50.6 percent for Asian households. Los Angeles' 17.1 percent average gap in homeowership rates across races is the #9 smallest gap of the nation's 50 biggest metros.”
But Salviati makes an important point. “The smaller racial gap,” he says, “doesn't necessarily indicate that everyone can afford a home.”