Minnesota Housing Partnership (MHP) recently published its “State of the State Housing Report” which illustrates critical insight into homeownership trends, racial disparities and the affordability crisis in Minnesota.

Housing affordability remains a significant challenge throughout much of the state. The cost of housing has increased sharply, with some areas seeing as much as a 50% rise in home prices since the COVID-19 pandemic.

This surge in prices is attributed to increased material and labor costs and the shrinking inventory of all housing types.

One of the major findings of the report is the pronounced racial disparity in homeownership across Minnesota. White households have significantly higher homeownership rates compared to households of color. In Central Minnesota, 81% of white households own their homes, compared to just 53% of non-white households.

This trend is consistent across different regions, including the Twin Cities, where 76% of white households own homes, compared to 47% of non-white households​.

To attempt to address some of these challenges, various initiatives have been introduced. The Midwest Minnesota Community Development Corporation is launching the Forgivable First-Generation Homebuyers Community Down Payment Assistance Fund in 2024. This fund will provide eligible homebuyers with up to 10% of the home’s purchase price, capped at $32,000, as a zero-interest loan forgiven over five years if the buyer remains in the home as their primary residence​.

However, MHP’s report concludes that although programs like this are a step in the right direction, the significant racial disparities and rising housing costs underscore the need for continued efforts and innovative solutions to make homeownership more accessible for all Minnesotans.