Housing First: Promoting Minnesota Homeownership & Housing Industry

Housing First: Promoting Minnesota Homeownership & Housing Industry

The Housing Industry makes up 15-18% of the Gross Domestic Product (GDP), providing millions of dollars in local income and thousands of jobs! If housing is doing well, then typically the rest of the economy is doing well.

Unfortunately, the U.S. homeownership rate has fallen to its lowest point in more than 50 years. While there are a number of factors that have contributed to this, the fact that on average, government regulations account for 24.3% of the final price of a new single-family home has not made purchasing a home any easier.

Research shows that for every $1,000 increase in the price of a home, about 2,000 Twin Cities' families and 4,000 Minnesota families are priced out of the market. This means the 84% of Twin Cities residents that say owning a home is central to the American Dream can no longer afford that dream.

All of this and more is why the Housing First Network has launched a public awareness campaign as we approach the new year.

The message of housing affordability, smart regulations and protection of the American Dream of homeownership for all has been and will continue to be promoted amongst Minnesota's influencers and the general public.

Why is homeownership important to Minnesota?

The homebuilding industry pays well (average construction occupation is paid $60k annually), provides millions of dollars in local income that will be spent in communities, provides millions of dollars in taxes and other revenue for local governments, and provides a sense of community for families!

Please continue to like, follow & share all of the updates from the Network!

 

 

Why Youth Should be Shown the Benefits of a Trade Job

Why Youth Should be Shown the Benefits of a Trade Job

The overall trend for open construction jobs has been increasing since the end of the Great Recession. According to the latest Bureau of Labor Statistics data and analysis by NAHB, there were 214,000 open construction sector jobs in July, which marks the second highest monthly county of open, unfilled jobs since May 2007. (Source: BuildingOnline)

And this number only looks to grow as the baby boomer generation retires.

Residential construction offers a number of fulfilling career opportunities, from architects and engineers to carpenters, plumbers, electricians, painters and landscapers. Yet, our builders are telling us that access to skilled labor remains a top challenge.
— NAHB Chairman Ed Brady

A great volume of available jobs the second you graduate high school, two year colleges, or four year universities. Plus great wages! And add in the opportunity to use your hands to build something.

Educators, parents and students should look at the trades!

Sources/Additional Readings: BuilderOnline. Forbes

MSP Sees Worsening Home Affordability

MSP Sees Worsening Home Affordability

A majority of the Minneapolis-St. Paul metro housing market has become less affordable, according to data composed by ATTOM Data Solutions.  

5 of the 7 counties measured indicate a less affordable market than the historic affordability averages in the 3rd quarter. The affordability index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3 percent down payment-including property taxes and insurance.

Anoka County

  • Percent of Average Wages to Buy: 38.9%
  • Q3 2016 Median Sales Price: $215,450
  • YoY Change in Affordability Index: -3%

Washington County

  • Percent of Average Wages to Buy: 42.6%
  • Q3 2016 Median Sales Price: $247,000
  • YoY Change in Affordability Index: -3%

Scott County

  • Percent of Average Wages to Buy: 41.8%
  • Q3 2016 Median Sales Price: $259,900
  • YoY Change in Affordability Index: -2%

Dakota County

  • Percent of Average Wages to Buy: 35.9%
  • Q3 2016 Median Sales Price: $243,800
  • YoY Change in Affordability Index: -1%

Ramsey County

  • Percent of Average Wages to Buy: 25.5%
  • Q3 2016 Median Sales Price: $200,000
  • YoY Change in Affordability Index: -1%

Hennepin County

  • Percent of Average Wages to Buy: 28.0%
  • Q3 2016 Median Sales Price: $244,000
  • YoY Change in Affordability Index: 0%

Wright County

  • Percent of Average Wages to Buy: 38.9%
  • Q3 2016 Median Sales Price: $204,888
  • YoY Change in Affordability Index: 3%

For nationwide analysis click here.

 

 

 

 

Where are the homes? MSP has undersupplied housing market

Where are the homes? MSP has undersupplied housing market

Though homebuilders in the Twin Cities are now busier than they've been in a decade, housing construction is still far below peak. That's especially true for entry-level houses priced from $200,000 to $350,000. (Jim Buchta, Star Tribune)

This is a long-term problem, and it’s real.
— David Siegel, Executive Director at the Builders Association of the Twin Cities

At issue, is a problem seen nationwide, but especially in the Twin Cities metro: the burdensome costs of regulation. Municipal fees typically make up 25%-30% of the cost of an average new home. That's nearly 1/3 of the cost!

And then you add into the mix: construct costs, labor, materials and land that are outpacing price and income gains. All of this creates an equation that causes a growing rift between new construction and existing homes.

Most homebuilders would like to build product for a majority of consumers, at your entry-level to middle-class tier. However, that is getting more and more difficult.

I want to build homes for everybody, but there are certain situations that limit our ability to do so. Some of it [is] just simple economics. There’s not as much land to build on in the places where people want to live. It’s a matter of supply and demand.
— Graham Epperson, Division President at Pulte Group

For the full article from the Star Tribune, click here.

Eisenberg: Plentiful Jobs, but...?

Eisenberg: Plentiful Jobs, but...?

While the US economy is creating plenty of jobs, it isn’t growing much.  In the first half of 2016, gross domestic product (GDP) grew at an anemic annualized rate of just 1%, compared to about 2% since the end of the recession, and 2.5% from 2000 through 2007. 

Usually, weak economic growth has been associated with weak employment growth. But not now! 

Employment growth during the first six months of the year totaled slightly over one million jobs, or a healthy average of 175,000 net new jobs/month.  If the historical relationship between GDP and employment that existed before the Great Recession still held, 40% fewer jobs would have been created since January. 

That said, what does slow growth mean for future wages, why is GDP growth so slow, is it likely to persist, and what does this imply about future interest rates? 

-Excerpt from Elliot Eisenberg, President of GraphsandLaughs, LLC. Read more here.

How can MSP Compete for Workers and First-Time Homebuyers?

How can MSP Compete for Workers and First-Time Homebuyers?

The labor shortage is something a majority of the country is experiencing. Decades from now we will look back on policies enacted TODAY that will decide what communities flourish or falter. How did we attract talented workers to come to our community and stay here as contributers to society?

Most of the young workers that communities are fighting for are in the process of deciding where they would like to establish roots. A number of factors play into that decision-making process including access to family, community vibe, and job availability.

Once young people find that place they would like to call home, purchasing a home is usually a major step in laying the family foundation. Unfortunately, MSP doesn't even crack the Top 25 in the second annual SmartAsset's study of the best cities for first-time homebuyers. 

At the end of 2015, less than 35% of adults under the age of 35 owned their home.

While Bloomberg's recent study listed MSP in the Top 5 for first-time affordability, SmartAsset's study looks at a number of other factors that indicate MSP may have some room to grow when it comes to providing a solid first-time housing market.

SmartAsset considered mortgage availability, value per square foot, affordability ratio, market volatility and negative quarters. While other Midwest communities made the list, Minneapolis-St. Paul does not have the number to attract the demographic we may need most, young people!

SmartAsset considered mortgage availability, value per square foot, affordability ratio, market volatility and negative quarters.

While other Midwest communities made the list, Minneapolis-St. Paul does not have the number to attract the demographic we may need most, young people!

Homeownership at 50-Year Low; Why this Matters

Homeownership at 50-Year Low; Why this Matters

According to a recent survey performed by the National Association of Realtors, 87% of consumers said homeownership is part of their American Dream.

87%!

Unfortunately, nearly 25% of those consumers are not current homeowners. New data from the U.S. Census Bureau shows that the homeownership rate in the second quarter of 2016 fell to 62.9%, its lowest since 1965.

So why does this matter?

There are a number of reasons that this should be concerning.

#1, This dramatic fall in homeownership is not the choice of consumers. Many have been priced out by burdensome regulation.

#2, People are renting longer and longer and longer. This is delaying wealth accumulation that these folks would experience as owners.

#3, Local economies miss out. Once households purchase a home, they want to constantly improve. They'll move from their starter home, to the next level, to the next level. And they'll remodel, they'll mow their lawn, they'll buy products from the local hardware store. The ripple effect is significant.

#4, Community structure lags. When households establish a place they call home, they get involved in their community. Their kids go to school in the area, they volunteer with local charities, etc. Families establish roots when they own a home. Not to say that renters don't get involved, but just not in the same manner that homeowners do.

Homeownership has so many benefits for families (young and old), communities, local businesses, etc. While owning a home is not for everyone, anyone that understands the responsibility of ownership should not be forced to deal with unnecessary barriers. We may never reach the levels of 2006 (and for good reason). But a 50-year low shows that a call-to-action is absolutely needed!

For greater analysis click here.

Housing First Network Launches 'Think Local' Campaign

Housing First Network Launches 'Think Local' Campaign

BATC’s Housing First Network recently launched the next phase of its issue advocacy campaign, Think Local. Following up on our issue advocacy campaign to thank housing champion leaders, Think Local promotes local prioritization of homes, which we know create and tie communities together. Much of the news and public conversation looks at national and international issues. While these are very important, the HF Network is asking the public to think about the benefits a strong housing market provides for our local communities.

The local leaders featured in the Think Local campaign are local elected officials and candidates for elected office that have demonstrated support for strong communities and a strong housing market. Election years are times for public discussion and consideration of priorities. As an issue advocacy campaign, Think Local encourages everyone to consider the local impacts of housing, and to support keeping homes affordable for Minnesota families.

Here are two videos of the Think Local campaign:

Think Local Lakeville/Burnsville

Think Local Shoreview Area

These issue ads will run for several weeks throughout the state. The budget for Think Local ensures that our message will reach audiences and continue to build upon BATC' communications platform which positions the housing market as tie binding communities. To learn more about Think Local and BATC's work through the Housing First Network- like, follow, and learn more here.

We ask you to join us.

Live. Build. Learn. Work. Play. Think…LOCAL!