The minority home ownership rate in MN has declined again which represents a prolonged trend of four years.
Minnesota housing officials state high minority unemployment rates are part of the cause. However the potential for home ownership rebounding because of record low home prices and lending rates.
Almost 75 percent of the state’s households owning their homes making Minnesota among the highest in home ownership rates in the country.
Minority households reached peak ownership in 2003 wtih just over 47 percent which is a hopeful sign that minorities were increasing wealth and entering into home ownership as MN first time home buyers.
However new census numbers illustrate MN home ownership rate for minorities is falling, indicated by Minnesota Housing Finance Agency commissioner Mary Tingerthall.
Home ownership rates dropped from 46.5 percent to 43.3 percent and that trend continued downward in 2010 to 41 percent,” she said.
Unemployment is part of the reason for declining minority home ownership rates in Minnesota. Unemployment in the general population is around 7 percent, but reaches 20 percent and higher for minorities, Tingerthall said.
“That, combined with tougher mortgage qualification standards, I think, has really landed a double whammy for communities of color.”
The MN Home Ownership Center reports there have been 100,000 home foreclosures with median home values decreasing by nearly 1/3.
Median Minnesota home values have plummeted on average by nearly a third.
However one homeowner’s pain is a potential home buyer’s gain, and there are many single family housing bargains at a time when interest rates are at record lows.
Tingerthall says, “It’s true that an average monthly mortgage payment costs more than rent.” However, the rental vacancy rate in parts of Minnesota is very low, and that puts upward pressure on rents.”
“Owners of rental properties will begin to see the opportunity for the first time in several years to raise their rents, so we’re concerned that people will really get caught in the squeeze not being able to qualify for a mortgage, at the same time seeing their rents going up.”
The Minnesota Housing Finance Agency has a program that this year will help slightly more than 2,000 MN first time home buyers. The Minnesota First Time Home Buyer Program helps with up to $8,500 down payment and closing costs and requires that they take housing classes to learn how to care for their property.