Two interesting and intersecting pieces of news today.
A brand new Zillow analysis of housing affordability shows that renting in the Twin Cities is historically unaffordable, while paying for a mortgage takes up less income than it did in pre-bubble years (1985-2000).
- In the Twin Cities, renters can expect to pay 25.6 percent of their monthly income on rent. Historically, they spent 19.7 percent on rent.
- For home buyers, mortgage payments are still more affordable than they were before. Today, buyers can expect to put 13.7 percent of their monthly income towards a monthly mortgage payment, versus 19.8 percent historically.
- If mortgage rates reach 6 percent next year, buyers can expect to spend 17.5 percent of their monthly income on mortgage payments.
Though a tidal of wave of people are renters by choice, the growing financial disparity between owning and renting is pushing more people into homeownership. Today the Minneapolis Area Association of Realtors released its July sales report, which shows that home sales increased more than 17 percent compared with last year. Other highlights:
- New listings fell just 0.4 percent.
- The total number of available properties for sale fell 11.0 percent to 16,940 homes.
- Millennials comprised 32.0 percent of all home buyers and 68.0 percent of first-time buyers—both the largest share of any group.
- The median sales price increased 4.7 percent to $225,000.
Come back to startribune.com for a full report on both topics.
