SEATTLE, March 5, 2019 /PRNewswire/ -- (NASDAQ: RDFN) --
Minneapolis has the nation's highest homeownership rate for low-income families, according to a
report from Redfin, (www.redfin.com), the technology-powered real estate brokerage. In the Minneapolis area, 57.7 percent of households with incomes in the bottom 25th percentile for the metro area
were homeowners in 2017, followed by Pittsburgh (55.8%) and St.
Louis (55.5%), all inland areas where the typical home sells for the less than the national median of $285,000.
"Homeownership allows people to share in the prosperity of their communities and gain wealth through home equity," said Redfin
chief economist Daryl Fairweather. "In many expensive metros, low-income residents aren't able to
access the benefits of homeownership because of a lack of affordable starter homes. But in areas like Minneapolis and Pittsburgh, low-income workers are still able to get their
foot in the door on the American Dream of homeownership."
|
Top Metros for Low-Income Homeownership, Ranked by Rates Among Bottom
25% of Income
Earners in 2017
|
|
Rank
|
Metro area
|
Homeowne
rship rate
among
households
in bottom
25% of
income
(2017)
|
Homeowne
rship rate
among
households
in bottom
25% of
income
(2012)
|
Percent
age
point
change
in low-
income
homeow
nership
from
2012 to
2017
|
Income
cutoff for
bottom
25% of
earners
in metro
area
(2017)
|
Homeowne
rship rate
overall
(2017)
|
Median
sale price
(Jan. 2019)
|
|
1
|
Minneapolis,
MN
|
57.7%
|
53.7%
|
4 pts.
|
$55,000
|
75.6%
|
$255,000
|
|
2
|
Pittsburgh,
PA
|
55.8%
|
53.8%
|
2 pts.
|
$41,000
|
74.3%
|
$149,000
|
|
3
|
St. Louis,
MO
|
55.5%
|
52.3%
|
3.2 pts.
|
$43,000
|
74.4%
|
$173,000
|
|
4
|
Detroit, MI
|
55%
|
51.8%
|
3.2 pts.
|
$40,200
|
74.8%
|
$122,000
|
|
5
|
Tampa, FL
|
54.4%
|
52.2%
|
2.2 pts.
|
$36,000
|
68.9%
|
$220,000
|
|
6
|
Louisville,
KY
|
54.2%
|
49%
|
5.2 pts.
|
$41,750
|
74.2%
|
$181,000
|
|
7
|
Salt Lake
City, UT
|
53.8%
|
53.2%
|
0.6 pts.
|
$52,000
|
75.4%
|
$319,000
|
|
8
|
Nashville,
TN
|
53.7%
|
49.6%
|
4.1 pts.
|
$43,400
|
71.7%
|
$284,000
|
|
9
|
Charlotte,
NC
|
53.1%
|
48.9%
|
4.2 pts.
|
$40,600
|
70.9%
|
$230,000
|
|
10
|
Philadelphia,
PA
|
52.6%
|
53.2%
|
-0.6 pts.
|
$51,000
|
72.8%
|
$190,000
|
"Minneapolis has a large supply of condos and townhomes that are priced lower than the median
for the area, which is one reason why it's affordable for people of all different means and backgrounds," said Chris Prescott, a Redfin market manager in Minneapolis. "There are still some
great locations in the area where homebuyers can purchase a single-family fixer-upper at an affordable price and build equity.
Plus, it's a large geographic area, so buyers can live outside the core and still enjoy a reasonable commute into the city or
find a good job in our growing suburbs."
Los Angeles, New York and San
Diego, all expensive coastal markets, are home to the three lowest homeownership rates for households in the bottom
quartile of income at 31 percent, 35 percent and 37.6 percent, respectively. Los Angeles and
San Diego feature in the top three least affordable places for millennials. This analysis
includes the 50 largest metro areas in the U.S.
In nine of the 10 metro areas with the highest homeownership rates for low-income families, the rate went up from 2012 to
2017, with the largest gains in Louisville (5.2 percentage points), Charlotte (4.2 pts.) and Nashville (4.1 pts.). Philadelphia is the only are in the top 10 where the homeownership rate went down during that time period,
but the drop was only 0.6 percentage points. The rate also rose in all 10 of the least affordable areas for low-income families,
with Sacramento (4.7 pts.) and San Diego (4.1) points seeing
the biggest increases. There are many explanations for rising homeownership rates among low-income families in expensive areas,
including households in the bottom quartile of income moving out of rental properties and into informal living arrangements with
family or friends.
The national overall homeownership rate and that for the bottom quartile of owners trended downward starting in 2004. For the
bottom quartile, it started to tick up in 2012, while the overall rate didn't start increasing until 2017.
In general, homeownership for people in the bottom income quartile is more common where housing is relatively inexpensive. But
as is evident in the chart below, low-income homeownership is also scarce in some inexpensive areas such as Columbus and
Memphis.
To read the full report, complete with charts, please visit: https://www.redfin.com/blog/2019/03/homeownership-rates-low-income-households.html.
About Redfin
Redfin (www.redfin.com) is the technology-powered real estate brokerage, combining its own full-service agents
with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's
#1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for
listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while
saving thousands in commissions. Redfin serves more than 85 major metro areas across the U.S. The company has closed more than
$60 billion in home sales.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, subscribe here. To view Redfin's press center, click here.
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SOURCE Redfin