Slides for Housing Advocates 2011

www.mhponline.org

2011 Slides for Advocates

January 2011

For more information, contact Leigh Rosenberg,Research &

Outreach Manager, Minnesota Housing Partnership

www.mhponline.orgContents

1. Employment

2. Housing Market

3. Housing Affordability

4. Focus on Renters

5. Homelessness

6. Future Trends

www.mhponline.orgContents

1. Employment

2. Housing Market

3. Housing Affordability

4. Focus on Renters

5. Homelessness

6. Future Trends

9.4%

7.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Unemployment Rate

US Official Rate, Seasonally adj Minnesota Official Rate, Seasonally adj

US, U-6 rolling average MN, U-6 rolling average

Source: Local Area Unemployment Statistics (LAUS), Minnesota DEED and US Bureau of

Labor Statistics (BLS)

U-6 uses 4-quarter rolling averages for Q4 08 onward and annual averages for 2005-2007. Official rate is U-3 measure.

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10

Residential Building Construction Employment, Minnesota

Source: Current Employment Statistics (CES), Minnesota DEED

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,0001

97

0

19

73

19

76

19

79

19

82

19

85

19

88

19

91

19

94

19

97

20

00

20

03

20

06

20

09

Units Permitted by New Building Permits, 1970-2009, Minnesota

Multi-family

Single Family

Source: MHP tabulation of US Census Bureau data

www.mhponline.orgContents

1. Employment

2. Housing Market

3. Housing Affordability

4. Focus on Renters

5. Homelessness

6. Future Trends

27,100

16,700

10,500

0

5,000

10,000

15,000

20,000

25,000

30,000

2005 2006 2007 2008 2009 2010 (projected)

Foreclosures: Minnesota by Region,2005-2010 (Projected)

Minnesota 7-county metro Greater MN

Source: HousingLink data. 2010 projection by MinnesotaHousing Partnership based on first three quarters of 2010.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1988 1992 1996 2000 2004 2008

Sheriff's Foreclosure Sales, Hennepin County, 1988-2010 (projected)

2010 estimate based on 1st 3 quarters. Source: Hennepin County, courtesy of Prentiss Cox; HousingLink.

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

(th

ru S

ept)

Average Home Sales Price, Twin Cities Metro

Adjusted for inflation (2009 dollars)

Source: Minnesota Housing Partnership tabulation of Minneapolis Association of Realtors data.

60%

65%

70%

75%

80%

1960 1970 1980 1990 2000 2010

Homeownership Rate, Minnesota, 1960-2009

Sources: US Census Bureau Decennial Censuses 1960-2000, American Community Survey (ACS) 2001-2009.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1960 1970 1980 1990 2000 2010

Racial Disparities in the Homeownership Rate, Minnesota, 1960-2009

White, Non-Hispanic

All

Non-white

Source: Integrated Public Use Microdata Series: Version 5.0

Twin Cities Metro Home Prices 2008-10

Source: Minneapolis Area Association of Realtors

Twin Cities Metro Home Prices 2008-10

Source: Minneapolis Area Association of Realtors

www.mhponline.org

Foreclosure Risk

Remains

• High unemployment

• Potential for falling home prices

• Negative equity

• Possible rate resets and recasts,

though less of a concern

6.6%

02,0004,0006,0008,00010,00012,00014,00016,00018,00020,000

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Q105

Q305

Q106

Q306

Q107

Q307

Q108

Q308

Q109

Q309

Q110

Q310

Mortgage Delinquencies & Pre-foreclosure Notices, Minnesota

60+ Days Mortgage Delinquency Rate Pre-foreclosure Notices

Del

inq

uen

cy R

ate

(60

+ d

ays)

Pre-fo

reclosu

reN

otices

Source: Minnesota Housing Partnership tabulation of National Delinquency Survey, Mortgage Bankers Association & Minnesota Home Ownership Center data

www.mhponline.org

17

Foreclosures and Income

Loss/Reduction

Source: 2009 Foreclosure Counseling Program Report, MN

Home Ownership Center

• In 2009, 61% of homeowners seeking foreclosure counseling

from MN Homeownership Center attributed mortgage default

primarily to loss or reduction of income.

• Loss of income (usually job loss) : 32%

• Reduction in income (reduced work hours, reduction in

government assistance, or loss of part-time job) : 29%

• Compares to 50% of seeking foreclosure counseling in 2008

attributing default to loss or reduction of income.

0

2

4

6

8

10

12

Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10

Twin Cities Homes-for-Sale Months’ Supply,2005-2010

All balanced

Increased Number of Vacant Homes

Source: HUD tabulation of US Postal Service data

Vacant ResidentialProperties

Sep 08 Sep 09 Sep 10Percent

Change Sep09-10

Duluth metro 6,326 6,197 7,187 +16.0%

Mankato metro 1,369 1,553 1,765 +13.7%

Twin Cities metro 38,203 33,592 44,012 +31.0%

Rochester metro 1,933 1,933 2,988 +54.6%

St. Cloud metro 2,627 2,653 3,081 +16.1%

Minnesota 81,286 79,050 96,561 +22.2%

www.mhponline.orgContents

1. Employment

2. Housing Market

3. Housing Affordability

4. Focus on Renters

5. Homelessness

6. Future Trends

8.4% 8.5% 7.9%

13.3%

22.8% 23.4%22.0%

32.8%

0%

5%

10%

15%

20%

25%

30%

35%

1980 1990 2000 2009

Proportion of Households Burdened by Housing Costs, Minnesota

Paying 50% or more of income for housing

Paying 30% or more of income for housing

Data sources: 1980 & 1990: National Historical Geographic Information System (NHGIS); 2000 Decennial Census; 2009 American Community Survey .

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Households Spending at least Half of Income on Housing, Minnesota

Renters

Owners

Source: MHP tabulation of American Community Survey (ACS) Data, US Census Bureau.

9.6% 9.4%

10.0%

11.0%

11.7%12.2% 12.3%

12.7%13.3%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

2001 2002 2003 2004 2005 2006 2007 2008 2009

Share of All Households Spending at Least Half of Income on Housing, Minnesota

Source: MHP tabulation of American Community Survey (ACS) Data, US Census Bureau.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1980 2000

Proportion of Renter & Owner Households Burdened by Housing Costs, Minnesota

Owners Paying 30-49% of income

Owners Paying 50%+ of income

Renters Paying 30-49% of income

Renters Paying 50%+ of income

Pro

po

rtio

no

f a

ll h

ou

seh

old

s

Source: Minnesota Housing Partnership tabulation of National Historical GeographicInformation System (NHGIS) , 2000 Census, and American Community Survey (ACS) data

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Housing Affordability by Essential Service and Common Occupations, Minnesota

Registered nurse median earnings Middle school teacherNursing aide Childcare workerOffice clerk CashierFood prep worker Income needed for median priced aptIncome needed for median priced home

Source: Minnesota Housing Partnership tabulation of Occupational Employment Statistics (OES), Minnesota DEED; American Community Survey, MN Revenue Department Sales Ratio Study, Federal Housing Finance Board Monthly Interest Rate Survey (MIRS).

64.5%

5.4%

52.7%

15.6%

57.8%

14.5%

0%

10%

20%

30%

40%

50%

60%

70%

Income Below $50,000 Income Above $50,000

Proportion of Households Paying 30% or More of Income for Housing, 2009

Renters Owners All

Source: MHP tabulation of American Community Survey (ACS) Data, US Census Bureau.

www.mhponline.orgContents

1. Employment

2. Housing Market

3. Housing Affordability

4. Focus on Renters

5. Homelessness

6. Future Trends

12.7%1.8% 7.4%

-3.2%

13.8%

-21.1%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

1980-1990 1990-2000 2000-2009

Percent Change in Median Rent and Renter Income, Minnesota (2009 dollars)

Rent

Income

Overall, from 1980 to 2009, real rental costs increased by 23%, and renter incomes fell 13%, from $32,500 to $28,300.

Data sources: 1980 & 1990: National Historical Geographic Information System (NHGIS); 2000 Decennial Census; 2009 American Community Survey.

1980s: real rentsincreased while renter incomes declined.

2000s: rents continued to increase; renter incomes fell dramatically.

1990s: rents rose, and incomes rose faster.

www.mhponline.org

More Need for

Rental

• Renters expecting to buy in next 3 years:

57% in 2003 and 52% in 2009

• Renters who think homeownership is a

good investment:

79% in 2003 and 61% in 2009

Source: Fannie Mae National Housing Survey, April 2010 Release

www.mhponline.org

More Need for

Rental

• Less rental affordability

• More foreclosures, less home ownership:

need for rental

• Limited rental construction in recent years

• Generation Y and Baby Boomer trends

$800

$820

$840

$860

$880

$900

$920

$940

$960

Q4 02 Q4 03 Q4 04 Q4 05 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10

Average Market Rents, Twin Cities Metro

Source: GVA Marquette Advisors

7.3%

3.8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Q4 02 Q4 03 Q4 04 Q4 05 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10

Rental Vacancy Rates, Twin Cities Metro

Source: GVA Marquette Advisors

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Population by Age, MN, 2000 & 2020

2000

2020

Boomers and older

Sources: American Community Survey (2009) and Minnesota Demographic Center (2020).

Gen Y

www.mhponline.orgDemographics

Generation Y:

• Key first time homebuyer population

• Household formation down; more likely to

change jobs & location

• Limited income growth; tight credit

market

Baby Boomers:

• Aging in place, but also need for senior

housing

www.mhponline.orgContents

1. Employment

2. Housing Market

3. Housing Affordability

4. Focus on Renters

5. Homelessness

6. Future Trends

www.mhponline.org

3,0794,553

5,645

7,696 7,854 7,751

9,6546.9

9.9

11.8

15.6 15.6 15.1

18.3

0

2

4

6

8

10

12

14

16

18

20

0

2,000

4,000

6,000

8,000

10,000

12,000

1991 1994 1997 2000 2003 2006 2009

Homeless Minnesotans Identified

on a Single Night

Individuals counted

Homelessness rate per 10,000 persons

Source: Wilder Research, Homelessness Study, 1991-2009.

Rate per 10,000Count

161 157

204

232

260 257

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010

Average Number of Homeless Families in the 4th Quarter, Hennepin Co.

Unduplicated monthly count of families seeking shelter through county-contracted shelters. Source: Hennepin County

www.mhponline.orgContents

1. Employment

2. Housing Market

3. Housing Affordability

4. Focus on Renters

5. Homelessness

6. Future Trends

www.mhponline.orgLooking Ahead

• Slow recovery from Great Recession

• Continued uncertainty in the housing

market (foreclosures, underwater owners)

• Limited new single family construction

• Increased need for rental

• Rehabilitation of existing housing

• Need to preserve affordable housing

• Potential for job creation

www.mhponline.org

Housing to Create

Vital Communities

Building affordable housing:

• Leverages public & private resources

• Creates jobs

• Generates tax revenue

• Builds lasting infrastructure

New! Legislative District Profiles

Visit the NEW www.mhponline.org site for Legislative District Profiles and

more.

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Find Legislative District

Profiles & Slides at: www.mhponline.org

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St. Paul, MN 55114

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