Anthony Cerrato lives with his fiancée, Maggie Arce, his father, and a family friend in a three-bedroom, two-bathroom home in the San Fernando Valley, an urbanized valley in Los Angeles County, Calif. It’s his father’s house, and being in his late twenties, communal living isn’t always ideal.
Cerrato’s mom passed away two years ago, and even before then, his family struggled to afford their mortgage. “It was like a dream of theirs to own this home and to buy and live here, but it’s always been a struggle,” he told Fortune. Cerrato has been helping his father out, contributing toward his mortgage payment each month and making sure there’s food in the fridge—and he’s saving money while he does so. After his mom passed away, Cerrato and his partner rented a studio in Canoga Park for $1,400 a month. But since moving back home, he generally gives his father around $700 to $1,000 each month for the mortgage alone.
In March, the California Housing Finance Agency introduced the “Dream for All” program built into the state’s annual budget. Later that month, the down payment assistance program for first-time homebuyers would be available, and those who qualified could receive a loan up to 20% of the purchase price of the home. (The homeowner would then pay back that loan amount and a percentage of any appreciation in the home value.) For Cerrato and his partner, it was a push for them to start seriously thinking about buying their own home. But in less than two weeks, the “Dream for All Shared Appreciation Loan” was put on pause, overwhelmed with applications and $500 million in funding that was cut to $300 million.
“It lasted only two weeks, and literally as we were looking at homes, our realtor was like, we just got an email that all funds have been completely locked up. There’s no more,” Cerrato said. “That was definitely kind of a hit to our overall mentality.”
“Dream for All” has since been revived, with $200 million in funding remaining, although it’s not clear when the program will begin accepting applications, or how long it will last this time. Even so, Cerrato’s fiancée recently lost her job. Before that, their combined income was around $130,000 annually, before taxes, he says. They’re still looking for a home in Bakersfield, Calif., in particular, where the average home value is $340,427 versus, let’s say, San Fernando, where the average home value is $685,439, or Los Angeles, where the average home value is $906,524. Their price range is around $200,000 to $250,000.
On social media, Cerrato shared a video of a three-bedroom, one-bathroom house listed on Zillow. It’s clearly rundown but listed for close to $220,000. The video was mostly a joke, and for over $200,000 for what he called “pretty much a trap house” and “something that’s completely dilapidated” is ridiculous, Cerrato explained. Still, in his view, seeing that made it seem like the floor of the market was being raised.
“It just kind of was like, wow, are we going to soon be priced out of a home in Bakersfield?” Cerrato said, later adding, “I’m not looking to buy a $350,000 [or] $400,000 home and be house poor. I refuse to be house poor. I lived that my entire life.”
And the floor of the market has kind of been raised. In March 2020, the onset of the pandemic, Bakersfield’s typical home value, according to Zillow, was $238,449. More than three years later, as of August 2023, the city’s average home value is $340,427. That’s almost a 42.8% increase in such a short period of time, while mortgage rates have more than doubled since their pandemic lows and are hovering above 7%.
When Cerrato started making money, after graduating from UCLA and working toward his career in marketing, that’s when things started to change. He was no longer house poor, Cerrato says, and they could all live comfortably and pay their bills. “Before, everything went toward the mortgage, and you had to figure out what you’re going to eat,” he said. That’s why even if he was approved for a $400,000 mortgage loan, he wouldn’t consider buying a house worth as much.
Cerrato didn’t grow up in the house he lives in now. He grew up in a one-bedroom apartment, living with his mother, father, and brother. “I’m used to sharing,” he said, “me and my brother slept in the living room.” They didn’t grow up poor, though, Cerrato explained. They still had an Xbox, PlayStation, computer, cars, but “we didn’t own a home,” he said. As he and his fiancée continue to look for homes in Bakersfield and the surrounding area, he knows there are reasonably priced homes that aren’t completely rundown, unlike the listing he shared online.
“I just hate to see that the floor of the market is starting to increase,” Cerrato said. “I’m just hoping that houses stay the way they are for the next couple months while I’m looking for a home. Hopefully they stay within a range that I’m able to afford.”
Before the program went on pause, he and his partner went into savings mode, Cerrato said, and they looked into liquefying any assets they had. Even after the program was halted, they still feel like owning a home is within reach, although his fiancée losing her job does make things a bit harder. “I’m willing to buy at a lower price point, so that way I can save myself that grief. That’s why I’m willing to move out to Bakersfield away from my family,” Cerrato said.
At one point, he considered Palmdale, Calif., where the average home value is $480,649 and is a bit closer to home, but he was priced out of that market given that home prices rose 31% in more than three years.
“I used to think of Palmdale as a place that I could afford a home, but now as I look, at my age when I can finally afford it, I realized I’ve also been priced out of there,” he said. “Now I gotta go a little bit further, and so the next best stop is Bakersfield.”
Still, Cerrato and his fiancée are in a bit of a unique situation, where he feels like their earning potential could become a lot higher. After losing her job, she’s started working toward getting her bachelor’s degree.
“It feels like if we wait another two years, then we’ll for sure be priced out. It just doesn’t feel like it’s worth it to wait much longer,” he said, adding that once they own their own home, they can eventually sell if their situation changes and buy another. That way their money is going toward an asset that will likely appreciate. But there has been something on his mind as he considers buying a house outside of his hometown, given that’s what he and his partner can afford.
“I fear that, the worst part about it, people who are coming from [other markets] are obviously starting to price people out of their own city, people who know Bakersfield as home. So I kind of I really empathize with that because it’s happened to me in my own hometown,” Cerrato said.
