State has No. 2 rank on homes owned

  • Article by: JIM BUCHTA , Star Tribune
  • Updated: October 6, 2011 - 11:36 PM

At 73 percent, Minnesota's homeownership rate trails only that of West Virginia.


Homebuyer Heath Stoll, left, and Realtor Steve Fiorella.

Photo: Carlos Gonzalez, Star Tribune

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Despite the biggest decline in homeownership rates since the Great Depression, roughly three-quarters of Minnesota households owned their houses in 2010, the second highest rate in the nation, the U.S. Census Bureau said Thursday.

Citing high Minnesota incomes and a long tradition of support for Minnesota homeowners, Twin Cities-area housing advocates weren't surprised.

"There's an emphasis on education and counseling that doesn't exist elsewhere," said Ed Nelson, communications manager for the Minnesota Home Ownership Center.

In Minnesota, the homeownership rate fell from 74.6 percent in 2000 to 73 percent last year. Across the country, the homeownership rate fell 1.1 percentage points to 65.1 percent during the same period.

Though the national decline seems only like a blip, it was the biggest decrease since the period between 1930 and 1940, when the homeownership rate fell from 47.8 percent to 43.6 percent.

Warren Hanson, CEO of the Greater Minnesota Housing Fund, said that for much of the past decade Minnesota incomes were relatively high compared with house prices. That's made it easier for Minnesotans to buy houses.

"And we've had good-paying jobs, lower unemployment rate through all these years, so I think the economics of a good strong economy over many, many decades have allowed for more stable homeownership."

Ellen Wilson, the survey statistician who helped write the report, said that given the downturn in the housing market and the general economic conditions, the declines were expected. She was less definitive about why some states did better than others. Wilson said the report didn't ask for data that might reveal a common denominator among states that fared well and those that didn't.

In fact, she said that it's difficult to draw conclusions from the report because the factors that affect homeownership rates are different for each state. In Michigan, for example, unusually low house prices might make owning a home cheaper than renting.

She agreed with Minnesota housing advocates who suggested that in Minnesota and other states with large populations in rural areas, homeownership rates tend to be relatively high because renters don't have many options outside of large metro areas. So buying a house is often their only option.

"Rural areas are more apt to have high homeownership rates than big cities," she said.

The report also revealed striking trends in vacancy rates and rental activity. Despite the historic decline in homeownership rates, homeowners still outnumber renters in the majority of the metro areas throughout the nation's largest cities, including the four most populous cities.

In New York, for example, renters made up 69 percent of households, followed by Los Angeles with 61.8 percent and Chicago with 55.1 percent. In Houston, 54.6 percent of all households were renters.

The report also includes data that revealed a staggering shift in the number of vacant housing units. It said that in 2010 there were 15 million vacant units across the country, an increase of 43.8 percent from 2000. That means that nationwide 11.4 percent of all housing units were vacant in 2010.

Jim Buchta • 612-673-7376

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