The latest 2x4 Report was released today, with findings that remind us that though the economy has improved for some, many others are being left behind. In sum, record numbers of homeless families sought shelter in Hennepin County, while rents continued to rise. On the other hand, falling foreclosures and mortgage delinquencies spelled good news for the beleaguered home ownership market.
There were many data records set this quarter. On the positive side for owners:
- Recorded foreclosures reached the lowest level since quarterly data collection began in 2007, with the foreclosure crisis already well underway.
- By the end of the quarter, the inventory of homes for sale on the Twin Cities market reached a 10-year low. Home prices rose by 16% compared to the year before.
- Pre-foreclosure notices dropped to about 6,900, the lowest quarterly count since data collection began in 2009.
And on the not-so-positive side, rents are rising, and more families are facing homelessness:
- The number of homeless families seeking shelter in Hennepin County reached a 12-year high for any quarter.
- Twin Cities rental vacancy rates have not been this low for such a long stretch since 2001. Vacancy rates have been under 3% for two years.
- In the Duluth public schools, 31% more children were homeless than the year before at this time in the school year.
With these divergent trends, it reminded us that sensible housing policy would help bridge the gap between higher income home owners, and renters and homeless folks struggling to meet their basic housing needs. The state and federal policy initiatives that MHP is working on would be steps in the right direction.
- At the state level, the Homes for All coalition is seeking state funding to stabilize families, prevent homelessness, and create housing affordable to the workforce.
- At the federal level, the Common Sense Housing Act of 2013, sponsored by Rep. Keith Ellison, targets substantial housing resources to preventing homelessness and ensuring rental affordability for the lowest income renters. This reform to the mortgage interest deduction would not only fund the National Housing Trust Fund, it would also enable more low and moderate income homeowners to claim tax benefits, while limiting tax benefits for portions of mortgages beyond $500,000 and for second homes. (You can learn more about this at the Federal Policy Forum event on April 4.)
A couple of other notable findings: Serious employment disparities persist, making housing instability more likely for some than others. On employment measures, Minnesota ranked 14th (out of 50 states plus DC) for white workers, but 37th for African-Americans.
Also, new building permits more than doubled statewide in the 4th quarter compared to the year before. This was especially true for construction of housing multi-family projects. Multi-family projects made up nearly 60% of the state's units permitted this quarter. This proportion of multi-family construction is more like the early 1970s than at any time since. This may bode well for employment in housing construction in the near future.
Be sure to read the full 2x4 Report for details!