State of home ownership report released
Even after the foreclosure crisis homeownership remains an important foundation for vibrant communities, the Minnesota Homeownership Center reported.
“Almost eight years after the foreclosure crisis began most homeowners and communities across Minnesota are rebounding and the clarity of distance is beginning to crystallize understanding of what drove the crisis,” the report states.
In 2013, 12,000 homes were foreclosed upon statewide fewer foreclosures than in any year since 2006 and less than half the total number recorded in both peak years (2008 and 2010).
By 2013, nearly 85 percent of clients facing foreclosure had fixed rate prime loans. And 75 percent of people served by the center’s network were facing job loss or reduced hours and income, medical bills or divorce.
Interesting tidbits: most people buy a first home between the ages of 25 and 44. In Worthington, the Swift plant buses employees more than 50 miles from Sioux Falls, South Dakota each day because of housing shortages. The MacArthur Foundation 2013 survey found more than three in four Americans believed the housing crisis wasn’t over.
The State of Homeownership update looks at trends the center. Those trends along with recent research gives a “snapshot of the different opportunities and barriers to homeownership impacting Minnesotans across age, race and regions today.”
Some of key findings in the report include:
• More than one-third of total household wealth is in homeownership, on average. Among Black and Hispanic households who own, homeownership still makes up nearly two-thirds of total wealth.
• Benefits of homeownership extend to civic engagement, health, education and more. For example, homeowners are 25 percent more likely to participate in civic and neighborhood groups.
• Neighborhoods are recovering unequally, widening the homeownership gap. The homeownership gap has returned to 1990 levels, and many neighborhoods where black, Hispanic and other communities of color are the majority of residents continue to face depressed prices and high foreclosure rates.
For example, in North Minneapolis prices have fallen so far that a homeowner who purchased in 2006 at the neighborhood’s median price would need to see their 2013 home value increase by 85 percent to return to its purchase price. A typical homeowner in Southwest Minneapolis, on the other hand, has already recovered any lost value.
• The next generation of buyers are influenced by personal, local economics. For millennials, home purchases have been delayed by a slow start to their careers and high levels of student loan debt. Still, 93 percent of millennial renters hope to own a home someday.
In greater Minnesota, local economies and the availability of homes are driving the next generation of homeownership. For example, Thief River Falls is managing shortages in homes available for purchase, and affordable housing generally, as major employers Arctic Cat and Digi-Key continue to add jobs.
• Future buyers are looking for information, smart choices. More than 9,000 Minnesotans sought out education from the Minnesota Homeownership Center Network in 2013 – a 30 percent increase compared to the number of people who participated in a course in 2006. The network is seeing people who sought help mitigating a foreclosure now returning to homebuyer education before getting back into homeownership.
“It’s the single biggest asset most people will ever own,” the center reported of homeownership. “And having neighbors literally bought-in to a community’s success puts homeownership at the heart of thriving neighborhoods where people are connected and engaged, communities are safe, schools are thriving and people are healthy.”
View the report online: www.hocmn.org/StateOfHomeownership.