Housing economist Elliot Eisenberg, Ph.D., has just completed a report for Housing Affordability Institute examining Minnesota’s declining homeownership rate. The report outlines how the state’s high cost of housing and housing shortage are detrimental to the state’s historically high homeownership rate.

Dr. Eisenberg finds that, over the past several years, Minnesota has experienced a notable decline in homeownership, a trend driven by a complex interplay of limited housing supply, high housing prices, and rising rental costs. While the state has historically enjoyed relatively high home ownership rates, the structural conditions in the housing market are now eroding affordability and blocking pathways to ownership for many Minnesotans.

Report Highlights

On Homeownership -

• Minnesota’s homeownership had its largest decline on record (40 years) in 2024, down 300 basis points in 2024 to 71.%.
• Concerning Dip: Since 2021, the state’s homeownership rate has fallen from 75.6% to 71%.
• The recent decline in homeownership is larger than the state saw before, during, and after the Great Recession (The period of 2007-2010)
• For the first time since 2018, Minnesota is no longer the region’s leader in homeownership. Iowa now leads the upper Midwest.
• 2024’s decline moved Minnesota from no. 8 to no. 15 nationally. 

On The State’s High Cost of Housing -

• Minnesota has the highest NEW and EXISTING median home prices in the upper Midwest
• Intersection of Supply and Demand: “High incomes alone do not protect against declining affordability.
• Without sufficient housing supply, those incomes are ‘swallowed’ by increasingly high home prices. In Minnesota, construction levels have not kept pace with demand, particularly in the single-family sector. *

On Supply and Production -

• Minnesota’s Housing Shortage stands at 98,000 units, 4.5 years of permits.
• Housing Permits have declined 35% from 2021 to 2024.
• Twin Cities: The Twin Cities is the epicenter of the state’s housing shortage with 75,000 units missing, representing 5.3 years of permits.
• Housing permits in the Twin Cities have declined 43% from 2021 to 2024.
• The rate of decline in Minneapolis-St. Paul single-family permits is more than triple that of the Chicago area. Twin Cities single-family permits are down 20%, compared to a 6.6% decline in Chicagoland.

On Economic Competitiveness -

• Estimates say that 62,932 jobs have not been created because of the housing shortage.
• The housing shortage has cost the state an estimated $9 billion in lost economic activity, that 2% of the state’s GDP. 
• At the individual level, the housing shortage has cost Minnesotans an estimated $5 billion in lost personal income

Conclusions -

A MARKET THAT CANNOT SELF-CORRECT...

“Without policy intervention, the shortage is unlikely to resolve on its own.”

WHAT’S AT STAKE...

“Encouraging new construction and removing barriers to affordability will be essential to sustaining Minnesota’s growth, competitiveness, and appeal for future generations.

Check-out the entire report:  Click here.

The Housing Affordability Institute is an adjunct to CMBA's partner, Housing First Minnesota.

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