By Jaime Deason,
Greater Riverside Area Consumer Lending Manager, Bank of America
Home sales in Southern California are down 9.1 percent for 2019 according to the California Association of Realtors, with San Bernardino County showing a 7.2 percent decline for the year and Riverside County declining 4.0 percent. Southern California overall has seen the prices of homes rise, with San Bernardino County seeing an increase of a 5.7 percent for the year.
Changes in tax policy and interest rates are both contributors to the slow-down in home sales, and that could be troubling news for the region since it’s widely accepted that higher homeownership rates benefit the community. According to the National Association of REALTORS®, there are several important benefits to owning your own home, including:
- Higher educational performance for children
- Greater participation in civic and volunteer activities
- Lower crime rates
- Better-maintained neighborhoods
Less recognized, but just as important, are the benefits that homeownership offers individual homeowners – emotionally, physically and financially.
Recently, Bank of America released the results of its Homebuyer Insights Report, which explores the attitudes, preferences and behaviors of the modern homebuyer. The study found that 93 percent of those who have bought a home say they’re happier because of it, and 83 percent said they wouldn’t go back to renting. While many recognize the financial benefits of homeownership, 82 percent say they also derive satisfaction from the time they spend on hobbies and passions since purchasing a home—including new pursuits, such as gardening, cooking and interior design.
Beyond hobbies, 78 percent say they feel satisfied with the quality of their social life and credit homeownership with their improved ability to entertain and gather with friends and family.
Whether to Rent or Buy
Some potential buyers on the cusp of homeownership may be weighing the pros and cons of buying versus renting. There are benefits to each, with renting allowing for greater ease if you’re planning on relocating frequently and requiring less money up front. But rents are also climbing throughout Southern California; as the Press-Enterprise noted, the average renter saw a $78 increase in monthly rents over the past 12 months.
Unfortunately, many prospective buyers fear the upfront costs and self-select out of homeownership without getting all the details. In fact, 69 percent of prospective homeowners say the biggest barrier to homeownership is saving enough money for a down payment and closing costs. The good news is that solutions exist to give prospective buyers the power to get over this hurdle.
To help buyers with rising home-purchase costs in the Inland Empire and elsewhere, Bank of America recently launched a $5 billion affordable homeownership initiative to help more than 20,000 individuals and families overcome home buying hurdles. Benefits include a new down payment grant program that gives (no repayment necessary) eligible borrowers up to $10,000 to be used toward their down payment. Homebuyers may also be eligible to receive up to $7,500, which can be used for non-recurring closing costs or to buy down their interest rate. And, through Oct. 31, we’re waiving the lender origination fee on our affordable loans, which could mean savings of approximately $1,000.
In addition to helping make homeownership in the Inland Empire more affordable, Bank of America also is working to help improve financial stability in the community by partnering with local nonprofits focused on putting people on the path to economic success, such as Habitat for Humanity and the Boys & Girls Club.
I’m proud that Bank of America is helping make homeownership a reality for more local families and investing in the Inland Empire to better the lives of the community.