In the third quarter of 2012, conditions were very clearly on the up-and-up for homeowners and the housing industry. Renters, however, are still awaiting brighter days, with rental housing scarce, especially for cash-strapped lower-income renters. The number of homeless families turning to Hennepin County for shelter reached a 12-year high this quarter, according to the latest "2 x 4" Report.
For homeowners, trends for the quarter were quite positive. Not only have Twin Cities home prices stopped tumbling, prices are starting to rise once again. Year to date, there have also been about 30% fewer foreclosures in 2012 than in the peak year of 2010. The 60-day mortgage delinquency rate, which is a predictor of foreclosures to come, fell to 4.6% in the third quarter of 2012 from a peak of 8% about three years ago. The anemic home-building industry is also seeing new life, especially in construction of multi-unit housing, such as apartments, as the chart below illustrates.
For renters, especially for those with limited income, rental housing continues to be difficult to come by. Rental vacancy rates remain exceptionally low at 2.7% overall in the Twin Cities metro, and even lower for more affordable apartments. Only 2.4% of apartments renting for under $1,000 per month were vacant in the third quarter in the region.
Limited employment options, in combination with high rental housing costs, are contributing to high levels of homelessness. Homelessness was up in the St. Paul schools, down in the Minneapolis schools, and up markedly in the Duluth schools (21% higher than last year at this time). An average of 335 families sought shelter from Hennepin County contracted shelters each month in the quarter, a 12-year high for the time of year.
In terms of employment, data from Minnesota DEED suggest that 145,000 Minnesotans are currently working part-time because they are unable to find the full-time work they'd prefer. Even more workers remain unemployed. Non-white workers and male workers are disproportionately limited to part-time work, as the table shows.
As we enter into the holiday season, the report gives us many reasons to be thankful, as well as a good reminder that we can still do better to ensure that all Minnesotans have a safe and affordable place to live.
Be sure to check out the full "2 x 4" Report for additional data and analysis to stay informed.