Editorial:
For a while we, were starting to feel better about our financial situation. The recession had subsided, more and more folks were going back to work, the constant drone of foreclosure news had died down, and even the price of gasoline, although still fluctuating, had dropped. But we were jerked back to reality this past month with the report by the San Diego County Apartment Association that the average monthly rent had increased by $254 per month over last year.
The report stated that the average rent per month was $1514. The average rent for a studio was $974 and $1,301 for a one-bedroom unit. A two-bedroom unit was $1,609.
In San Diego, the medium income for Hispanics is $62,962 per year which means one-third of the monthly income will go to rent alone. In National City where the medium income is $38,849, the rental picture is bleak.
When you couple the news of higher month rent increases with the fact that more and more Hispanics are unable to buy a home, you can conclude that more and more Hispanics will be paying a larger percentage of their pay for rent this year. That percentage will continue to rise.
Hispanic homeownership hit a peak of 50% before the recession, declined to 44% today, and is dropping according to The Demand Institute’s report, “Hispanics & Home Ownership: Closing the Gap.”
Prior to the recession, mortgage companies were signing off on home loans based on the applicants’ word alone, which lead to the market crash when these new homeowners could no longer afford their mortgage payments. Since then, mortgage brokers have gotten stricter and it is much harder now to buy a new home!
To buy a new home it takes a down payment of 20%. The average home for sale in San Diego County is $483,000 which means that you need $98,534 cash, excellent credit, and you have to prove that you can repay the loan.
With higher rents, the fact that many of the jobs being created over the last couple of years are not sustainable or are low-wage jobs, the opportunity to achieve the American Dream of homeownership is slipping away for many Hispanic families.