Why You Can Afford a Home in the Twin Cities Area of Minnesota

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Since the 2009 recession, Minneapolis has recovered strongly and experienced excellent job growth and stability. The city’s unemployment rate is the lowest in the entire nation, at 2.3% in October 2018. That is better than the unemployment rate for the state of Minnesota and for the US as a whole, which was 3.9% for the same period.

People who are looking for good jobs in the Twin Cities will find them here, at one of the many Fortune 500 companies who make their home in the area or one of the diverse economic sectors such as manufacturing, education, government, health care, and finance.

With all these good jobs and low unemployment, the real estate economy is doing quite well. More people than ever can afford to buy a home in the Minneapolis and St. Paul area. At TwinCity Lending, our job is to get you into the home of your dreams by finding favorable mortgage financing you can afford and sustain. While the economy is strong, it’s a good time to put down your roots in the Twin Cities. Contact us to learn how to afford a home in the area.

It’s all well and good to say that you can afford a home in the Twin Cities, but let’s take a look at the numbers. When you examine the cost of living in Minneapolis, the average home prices, and jobs available in the area, you’ll soon learn why homeownership is not just a pipe dream for Twin Cities residents.

Affording a Minneapolis Home

The median home price in Minneapolis was $257,100 in 2018. To qualify to purchase a home at this price, you typically need a combined household income of around $75,000 annually, and twenty percent down. According to the Census ACS 1-year survey, “the median household income for the Minneapolis, St. Paul, and Bloomington Minnesota metro area was $76,856 in 2017, the latest figures available”.

The figures quoted above put the Twin Cities’ median household income at around “$16,520 greater than the US median household income” and $8,468 higher than the median household income for the state of Minnesota. These numbers mean that the average Minneapolis household can afford to purchase a home which is great news for those who want to achieve the dream of homeownership.

And while $257,100 is the median home price point, there are properties below and above that midpoint. There is are homes in the Twin Cities for high wage earners who want luxurious and high-end properties and for lower-income families who wish to realize the dream of homeownership.

If we eliminate St. Paul and Bloomington from the calculations, the median family income for Minneapolitans was $96,807 in 2017, according to the same survey. With that income, it is easier than ever to buy a home in the city. You will qualify for mortgage loans for homes over $350,000 and be able to put less money down. There are hundreds of home options for you to choose from in Minneapolis at that price point, from trendy lofts to townhomes to single-family suburban homes.

Good Jobs in Minneapolis

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How do you determine what makes a “good job?” It depends somewhat on the person, but in general, a good job means a living wage, competitive benefits, good working conditions, and opportunities to advance. That’s according to Bruce Corrie, a Concordia University economist who studies employment and cost of living.

There are many types of these jobs available in Minneapolis, across many different economic sectors. One of the most in-demand industries in the area is health care. Companies are hiring registered nurses, nursing assistants, licensed practical nurses, and personal care aides. Radiologists, sonographers, and other medical technical positions are in high demand also.

The median wage for an RN in Minnesota is $72,000, and higher in Minneapolis proper. Registered nurses can afford an average Minneapolis-area home as a single homebuyer. Medical secretaries and assistants earn a livable wage at around $35,000 to $40,000 annually — a tidy sum to contribute to a household income and qualify for a home.

In addition to health care, other in-demand occupations in the Minneapolis area are in information technology (IT), finance, manufacturing, and construction. The city is experiencing a real estate boom, with lots of new construction and renovation work to convert former industrial structures into beautiful urban living spaces.

If you’re looking for jobs in Minneapolis, MN, many Fortune 500 companies are hiring. US Bancorp has its headquarters in the city and employs about 13,000 people in Minnesota. Target Corporation also has its main corporate offices in downtown Minneapolis, and 17 other of the largest US companies also call the city home.

From 3M to Best Buy to United Health Care, General Mills, and Hormel, there are plenty of well-paying jobs for college graduates. The city also has a strong manufacturing base as well as retail, leisure, construction, and truck driving careers available for residents who do not have a bachelor’s degree. In all, the job market is plentiful for living wage jobs that allow people to afford a home.

Cost of Living in Minneapolis

It costs a bit more to live in Minneapolis than the United States on average. The cost of living index measures 100 as the average cost of living in the nation; Minneapolis sits at 116 overall, and the state of Minnesota is slightly more expensive than the national average at 106 on the index.

Some things are cheaper in Minneapolis, such as groceries (93 vs. 100) and healthcare is markedly less expensive in the area at 87 on the index. Housing is the most significant expense for Minneapolis residents, and the cost of living index rating of 138 reflects that. However, you’ll recall that the average household income in the area is also much higher than the state and national averages, helping offset the higher cost of living with higher wages.

Contact TwinCity Lending and Become a Homeowner

As you can see, if you have a job in the Twin Cities area, you’re living and working in a place where the dream of homeownership is possible. There are many affordable housing options for Twin Cities residents and homes available in a variety of price ranges and budgets. Get in touch with us today and let us help you find your way to homeownership in Minneapolis or St. Paul.

The Housing Market in Minneapolis vs. the Nation

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Buying a house is a big decision, and the process can be quite scary. Investing so much of your hard-earned money in one place can feel overwhelming. Beyond just price, you will spend a significant amount of time in your home, so you want it to be a good one.

You will often hear the terms “buyer’s market” or “seller’s market” in the real estate industry. What are these terms and what do they mean to you? The US housing market can be a fickle monster, and the trends are ever changing. Plus, the housing market differs regionally, so it can be hard to know what you are going to get.

TwinCity Lending is a Minnesota-based lending company that specializes in low-interest home purchases and refinance loans. We like to keep things simple. The goal is to keep overhead costs low, so our clients have to spend less. We know the local and national housing markets, and can help you navigate the sometimes murky waters of buying a home.

What is the Housing Market?

The Housing Market, in general, is the availability of houses compared to the demand for those houses. Often, it is broken down by country or region. The US housing market is entirely different from the Chinese housing market, just as the Minnesota housing market differs greatly from the San Francisco housing market.

A housing market is based mostly on the average price of homes in that area as well as where the prices are trending. In a “buyer’s market,” there is a greater supply of homes than demand for them. This imbalance gives buyers an advantage over sellers because sellers have to compete for buyers. A buyer’s market can result in lower prices for homes as sellers accept a below-list price offer in order to get the sale.

On the contrary, a “seller’s market” is when there is a higher demand for homes than supply. In this market, house prices typically increase as there are more buyers than sellers. Houses will often sell incredibly quickly in a seller’s market.

How is the US Housing Market?

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Most of us have heard the term “housing bubble,” and the subsequent pop of that bubble in 2006. This event was particularly devastating because it led to a nationwide recession. Between 2006 and 2012 home prices fluctuated but many had significant drops. A slump in the housing market affects just about every area of our economy.

Since then, policies regarding lending and home buying have changed. The market is not back to where it was, but the national economy, in general, is in a better place. According to US News, the housing market is seeing the highest interest rates since 2011, evidence of this stronger economy. Interest rates rose three separate times in 2018 and are expected to rise at least once in 2019.

Though these rising interest rates are a good sign for the overall economy, they can make many buyers hesitant to dive into the housing market. The good news is that these rising rates should not add much to your monthly mortgage payment. However, even an extra $100 a month could cause some people to hold off buying.

Due to the decline in buyers because of rising interest rates, home prices are growing slowly, if at all. Homeowners who are interested in selling might reconsider putting their home up for sale.

The potentially lower selling price of their current home, plus the necessity to buy in this higher-interest market might make sellers hold off if they can. Many current homeowners will keep their home and build equity by paying down their mortgage.

Data put out by Realtor.com corroborates this trend. The US housing market is experiencing a slower start in 2019 than in previous years. About 15 percent of home listings in the United States received a price cut this month to try to stimulate sales.

In the US overall, residential construction still hasn’t rebounded to where it was before the bubble burst. Builders are more cautious because if there were to be another recession, housing prices would dip, and they might not be able to recover their investment.

Due to this caution, there are not enough housing starts to meet the current demand for homes nationally. Most new construction has focused on high-end, luxury homes, rather than affordable housing.

How is the Housing Market in Minneapolis?

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Real estate agents and economists in the Twin Cities have seen some of the effects of these national trends. However, many experts have pointed out that the housing slowdown isn’t as noticeable in Minneapolis and Minnesota as other parts of the country.

David Arbit, the director of research and economics at Minneapolis Area Association of Realtors, believes that while the local housing market is not gearing up, it isn’t necessarily declining, either.

To make things more interesting, home prices in Minneapolis are not falling. Homes across the area are continuing to sell for close to their asking price. Strong sales are an indicator that the market is still beneficial for sellers.

Even in Minnesota, mortgage rates have risen to an average of more than 5% for a 30-year fixed loan. While this is the highest rate in years, it is still low in the historical view. Minneapolis is an incredible place to call home. Even though nationally the housing market is slowing, there are still plenty of homes on the market in the Twin Cities.

The average house in Minneapolis sells for about $245,000. The average local buyer puts down 13.6% of the selling price. All of these aspects show how affordable Minneapolis is, and why everyone should consider buying a house here. In particular, young professionals and first-time buyers can benefit from buying now.

Call TwinCity Lending Today

At TwinCity Lending, we want to help people get into their dream home. We spend a significant amount of time analyzing the housing market. We work hard to ensure that you are buying your home at the best rate possible.

Furthermore, we make sure you don’t end up paying a hefty amount in fees. We know you don’t have time for that.

Check us out online and browse our tools to help you understand what you can afford, and what your mortgage payment might be. We will even help you decide if you should buy or rent! We will help see if you qualify for a mortgage, and calculate your tax savings. Call us today and see how soon you could be moving into your dream house.

Minneapolis Economy and What it Means for Home Buyers

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If you’re looking to buy a home in Minneapolis, 2019 may be a good year. The Twin Cities’ economy is thriving, and analysts predict continued prosperity and positive trends. There is a boom of new construction in both urban and suburban areas. And massive renovation projects are reclaiming former industrial structures and turning them into the hottest new lofts, condos, and neighborhoods downtown.

TwinCity Lending knows the local economy and will help you get favorable financing for your dream home. We can help you figure out timing, payment terms, closing costs, and interest rates so you can close the transaction on that contemporary chic condo overlooking the Mississippi or the home with the fenced backyard for your kids and pets.

Several demographic and economic factors affect the housing market and help determine whether it’s a good time to buy a home. Unemployment, demand for homes, population changes, construction, taxes, and interest rates all affect your ability to purchase a home and what price you will have to pay.

Twin Cities Unemployment is Lower than the National Average

In early 2019, the national unemployment rate is 5.2 percent. Minneapolis and St. Paul are doing even better, with the local unemployment rates at 3.7 percent and about 4.1 percent respectively. Large employers in the area include corporations headquartered in Minnesota, such as 3M, Target, Best Buy, US Bancorp, General Mills, and United Health Care.

The low unemployment rate means jobs are plentiful and businesses typically are hiring. That is good news for potential home buyers because they have a lower risk of being laid off from a job. Workers also have greater mobility in a healthy economy with low unemployment. You can search for a different position — perhaps one with better salary and benefits — while continuing to work at your current one.

<h2″>Mixed Economy

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Minneapolis and St. Paul’s economies are strong because of public and private investment. Minneapolis has a robust manufacturing base that includes electronics, medical products, milling, food processing, and machinery manufacturing. The city’s economy also benefits from the presence of high-tech companies, several universities and technical schools, and 30 Fortune 100 companies. In addition to the private sector, the Twin Cities has many government institutions, from the ninth Federal Reserve to state-level government offices.

Furthermore, Minneapolis’ local government and Chamber of Commerce have invested heavily in the city’s infrastructure. Their economic development grants transformed vacant mills and constructed the Skywalk that makes it easier to navigate the downtown business area. A mixed economy such as the Twin Cities boasts, bodes well for tax revenues and further investment. With both private and public support, Minneapolis’ economy can better weather any downward dips that come its way.

Positive Trends

Analysts forecast that job growth in the Twin Cities area will continue to outpace that of the nation. The Minneapolis job market grew 1.2 percent over the last year, and economists forecast 38.8 percent growth over the next ten years. These trends correlate with a stable housing market in which homes hold or increase their value.

At $32,232, Minneapolis residents have a higher average annual income per person than the US national average of $28,555. While the cost of living in Minneapolis is slightly higher than the national average (116 vs. 100), the higher wage gap more than offsets the difference.

Diverse Community

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The Twin Cities consistently ranks as one of the top places to live in the United States, especially for young professionals. Minneapolis ranks alongside Chicago, San Francisco, and Brooklyn, as a mecca for hipsters who value local economies, walkability, environmental sustainability, the arts, entertainment, a thriving food scene, and natural spaces.

As the area’s reputation increases, more people want to move here. This desirability drives the price of homes up, so buying now means that you will earn equity quickly as the value of your home rises. In 2018, homes in St. Paul increased in value an average of 9.3 percent, again besting the national average.

Favorable Interest Rates for Mortgages

Interest rates for 30-year and 15-year fixed rate mortgages remain low and affordable. Lower interest rates mean that you pay less for the home in the long run so that you can afford more house or a higher sale price and stay within your budget.

Mortgage rates have again fallen below the 5% mark in 2019. The average 30-year-fixed loan interest rate is around 4.5%, and a 15-year fixed rate mortgage average interest rate is approximately 4% as of February 2019. Analysts predict the housing market will remain robust, so there will be stable buyers and sellers. Lenders such as TwinCity Lending are here to secure home loans for those ready to buy.

Economy Predicted to Continue to Do Well in 2019

According to analysts, the national economy will remain strong in 2019. Most predict that unemployment will continue to drop, and positive economic indicators will cause inflation. When this happens, the Federal Reserve increases the federal funds rate between banks, which helps slow or stem the higher prices that come with inflation.

When the Fed raises rates, banks increase interest rates for borrowers and investors. For homebuyers, higher rates increase the cost of your purchase and your monthly mortgage payment. To stay within your budget or to qualify for your loan, you will need to borrow less by purchasing a lower-priced home or having more cash at closing.

Start Home Shopping Now

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Many people move in the summer months, which is easier for families with children who need to switch schools. To move in the summer, sellers start listing their homes in February and March, expecting about 90 days minimum from listing to closing. Additionally, builders and contractors finish many projects as the weather warms.

That trend means now is a great time to start buying a home before rates rise. There will be more homes on the market in the next few weeks, and the Minneapolis and St. Paul economies are thriving and trending upward. As more people become interested in this area, your home’s value will increase. Buy now so you can build equity right away.

Contact us at TwinCity Lending, and one of our expert loan counselors will assist you every step of the way in the home buying process.