The Real Talk on Affordability for First Time Buyers in Orange County

If you are a first time buyer in Orange County, you have probably heard that the market is tough. That is true, but the full picture is more nuanced than the headlines suggest. Here is what you actually need to know.

How Bad Is Affordability, Really?

Pretty challenging, to be honest. The monthly payment for the median priced OC home now represents 71 percent of the median household income. For context:

• In 2012, it was just 33 percent
• In 2000, it was 40 percent
• At the peak before the 2008 crash, it was 63 percent
• Today it is 71 percent, the highest it has been in modern history

The combination of home prices that surged 37 percent during COVID and mortgage rates that jumped from 3 percent to over 6 percent created a perfect storm for affordability. Incomes simply have not kept up.

So Why Are People Still Buying?

Because renting is not getting cheaper either. And because waiting has a cost too. If mortgage rates drop to 6 percent, the monthly payment falls. At 5.5 percent, it drops further, and that is when a wave of buyers who have been sitting on the sidelines will come flooding back. More buyers means more competition and higher prices. First time buyers who act before that happens lock in today's negotiating leverage.

Programs That Can Help

If you are a Schools First Federal Credit Union member, the Home360 program is one of the best first time buyer programs in Southern California. I work with Schools First buyers regularly and can walk you through exactly how it works and what you qualify for.

There are also down payment assistance programs, rate buydowns, and seller concession strategies that can make a significant difference in your monthly payment.

The Honest Bottom Line

Homeownership in Orange County is hard right now. But it is not impossible, especially with the right guidance, the right lender, and the right agent in your corner.

Let us have a real conversation about your numbers. No pressure, no sales pitch. Just honest advice.