Redfin Report: Minneapolis, Pittsburgh and St. Louis Top Metros With Highest Homeownership Rates for Low-Income Families
Three southern metros--Louisville, Charlotte and Nashville--experienced the largest rise in low-income homeownership from 2012 to 2017
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 | |||||||
Rank | Metro area | Homeowne | Homeowne | Percent | Income | Homeowne | Median |
1 | Minneapolis, | 57.7% | 53.7% | 4 pts. | $55,000 | 75.6% | $255,000 |
2 | Pittsburgh, | 55.8% | 53.8% | 2 pts. | $41,000 | 74.3% | $149,000 |
3 | St. Louis, | 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, | 54.2% | 49% | 5.2 pts. | $41,750 | 74.2% | $181,000 |
7 | Salt Lake | 53.8% | 53.2% | 0.6 pts. | $52,000 | 75.4% | $319,000 |
8 | Nashville, | 53.7% | 49.6% | 4.1 pts. | $43,400 | 71.7% | $284,000 |
9 | Charlotte, | 53.1% | 48.9% | 4.2 pts. | $40,600 | 70.9% | $230,000 |
10 | Philadelphia, | 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.
SOURCE Redfin
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