Homeownership is the foundation for today, tomorrow and the future.
Just ask homeowners in California, who enjoy their own piece of the American dream – in Golden State style. Backyard barbecues, binge-watching on the couch, cooking gourmet meals in the kitchen or planting flowers and veggies in the garden are just some of the fun of homeownership.
But homeownership is much more than burgers on the grill or bulbs in the ground.
June is National Homeownership Month, when federal and state agencies, lenders and real estate agents educate and encourage home-shoppers to become homeowners. Homeownership is critical for building strong communities (property tax is the largest revenue source for the State of California), creating jobs, energizing the economy – and is often a good investment for homeowners over time.
More than 1.1 million foreclosures past decade in California
Keep Your Home California has helped more than 73,000 homeowners stay in their homes, avoid foreclosure, escape negative equity, and get back on their financial feet. The free mortgage-assistance program has allowed these families to continue enjoying the benefits of homeownership.
If these families would have lost their homes, it would have been devastating financially and emotionally. For most of these homeowners, it would take several years before they would have been eligible for a mortgage, if they could even come up with the necessary down payment, which has become increasingly difficult as home prices increase in the state.
Currently, only one of three families can afford the median-priced home in California, compared to almost 50% in first-quarter 2012. The dramatic decline has taken place in less than five years, according to the California Association of Realtors (CAR).
Being forced to move from a home – either from a foreclosure, deed-in-lieu of foreclosure or short sale – has an emotional effect on homeowners and their families, especially if their children are attending local schools.
More than 1.1 million California homeowners – or the equivalent of everyone in San Jose, the third-largest city in the state –lost their homes during the foreclosure crisis of 2006-2016, according to CoreLogic. In fact, California had 193,000 foreclosed properties in October 2009, or more in that month than 40 other states for the entire past decade.
Homeownership is often a good long-term investment in Golden State
Despite the dark days of the past, many Californians embrace and enjoy homeownership, while many renters dream about becoming homeowners.
“After all we’ve been through, homeownership remains an American value and the cornerstone of our economy,” said U.S. Housing and Urban Development Secretary Ben Carson in a news release on National Homeownership Month. “Today, we recognize the abiding value of owning a home and rededicate ourselves toward ensuring that every hardworking and credit-worthy American enjoys a fair chance at becoming a homeowner.”
Of course, becoming a homeowner is not easy for most Californians, but it’s often a good investment. Fortunately, there are programs available to help potential homebuyers, such as the loan programs offered by the California Housing Finance Agency.
The state’s current median-home price is almost $537,000, the highest level since August 2007. That’s more than double the price in less than eight years.
The state’s median home price has increased 18 of the past 20 years, though the drops were dramatic at 38% in 2008 and 21% in 2009, thanks to the Great Recession. And there have only been nine down years since 1969, with only two years of price drops of more than 5% (yep, 2008 and 2009).
Hardships hurt everyone, from neighborhoods to state budget
California homeownership, as you can see, has been a good investment. As such, it is important to help existing homeowners remain in their homes to protect that investment – especially in California’s still recovering economy.
Many homeowners were affected by the Great Recession and some areas are still struggling, especially in the Central Valley, High Desert and Northern California. Less than 4% of the homes in Bakersfield, Fresno and the Inland Empire (Riverside and San Bernardino counties) have passed their peak price, meaning many homeowners have underwater mortgages, according to a Trulia report.
And almost 281,500 homeowners in California had negative equity during the first quarter of 2017 and owe more than the current value of their home, according to a new CoreLogic report.
Some of these homeowners are dealing with a hardship – such as a job loss, cut in pay, divorce, death in the family, extraordinary medical expenses or even an unaffordable or underwater mortgage (or both) – and could apply for Keep Your Home California.
The federally funded, state-managed program helps homeowners with what is often their largest investment, ensures stability for their families and neighborhoods, and even protects funding for local governments and the state.
A recent economic impact report found that Keep Your Home California preserved $2.5 billion in economic activity statewide, from property and sales-tax revenue to jobs. Basically, for every dollar the federally funded program issued, $2 of economic activity was preserved.
Keep Your Home California is committed to helping low- to moderate-income homeowners to remain in their homes. Homeowners must have a financial hardship, such as a job loss, cut in pay, divorce, death in the family or extraordinary medical expenses in order to qualify for assistance.
In addition to the financial hardship, homeowners must meet county-by-county income requirements and their mortgage servicer – the company that collects the monthly payment – needs to participate in Keep Your Home California.
Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-KEEP (5337) or visit www.KeepYourHomeCalifornia.org or www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.