Recent trends in foreclosures have been cause for concern throughout Minnesota. One mortgage foreclosed for every 54 households from 2005 through 2007, and projected foreclosures for 2008 are higher still.[i]
Source: MHP tabulation of HousingLink (2005-2009) data.
The rise in foreclosures has been accompanied by other trends indicating increased pressures on families in affording housing. The heavily populated Twin Cities metropolitan area has seen a tightening rental market, with rising rents and falling vacancy rates. After years of a far lower unemployment rate than the US average, Minnesota unemployment looks similar to the country as a whole. In November, nearly 190,000 Minnesotans were unemployed.[ii] Finally, winter heating costs are trending upward.
Twin Cities Rental Market
Source: GVA Marquette Advisors Apartment Trends.
Source: MN Department of Employment and Economic Development LAUS data.
MHP tabulation of EIA Short-Term Energy Outlook & MN State Energy Profile.
Reports of homelessness have increased, with loss of rental units due to foreclosure, economic woes, and a tight rental market. From 2006 to 2008, the average number of families using Hennepin County contracted shelters per month grew by nearly 60%.
Source: Hennepin County data.
Note: 2008 data is for January through November only.
Monthly count of families is unduplicated.
Recent market trends are especially sobering in light of the preexisting burden of housing costs on families. By 2007, 1 in 8 Minnesota households were paying more than half of their income for housing, indicating severe cost burden. In fact, between 2000 and 2007, Minnesota had the fastest growth in severely cost burdened households of any state in the nation.[iii]
[i] HousingLink, 2008
[ii] MN Department of Employment and Economic Development, LAUS data
[iii] MHP tabulation of American Community Survey and 2000 Census data