Department of Numbers

Minneapolis, Minnesota Home Affordability

The data below measures home affordability for the Minneapolis-St. Paul-Bloomington, Minnesota metropolitan area using price-to-income and price-to-rent metrics.1 The maximum affordable loan amount for the median household income is also calculated. You can also compare Minneapolis home affordability to other cities.

Minneapolis, Minnesota Home Price-to-Income Ratios

The current price-to-income ratio for Minneapolis is 2.97 as determined by December 2013 Realtor median sales prices. The second chart shows a history of the ratio as an index calculated from the Federal Housing Finance Agency's Minneapolis HPI series. Median household income data for Minneapolis is from the Census American Community Survey.

Price-to-Income Dollar Ratio: Realtor

Price-to-Income Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Minneapolis, Minnesota Home Price-to-Income Ratio History

Date Realtor
(Dollar Ratio)
FHFA
(Index Ratio)
December 2013 2.97 112.4
September 2013 3.14 112.2
June 2013 3.01 108.4
March 2013 2.57 105.7
December 2012 2.59 105.0
September 2012 2.59 103.6
June 2012 2.59 101.9
March 2012 2.59 102.4
December 2011 2.44 109.0

Minneapolis, Minnesota Home Price-to-Rent Ratios

The current adjusted price-to-rent ratio for Minneapolis is 17.23 as determined by December 2013 Realtor median sales prices. This ratio is calculated using household size adjusted median contract rent for Minneapolis. The chart below shows an index of the rent ratio calculated from the metro FHFA HPI series and the Minneapolis median contract rent data from the Census ACS.

Price-to-Rent Dollar Ratio: Realtor, Realtor Adjusted Rent

Price-to-Rent Index Ratio: FHFA

Note: Index set to 100 in Q1 of 2000

Minneapolis, Minnesota Home Price-to-Rent Ratio History

Date Realtor
(Dollar Ratio)
Realtor Adjusted
(Dollar Ratio)
FHFA
(Index Ratio)
December 2013 20.03 17.23 100.2
September 2013 21.14 18.19 100.0
June 2013 20.28 17.45 96.6
March 2013 17.34 14.92 94.2
December 2012 17.46 15.02 93.7
September 2012 17.46 15.02 92.3
June 2012 17.46 15.02 90.9
March 2012 17.46 15.02 91.3
December 2011 16.42 13.72 97.0

Minneapolis, Minnesota Home Rent-to-Mortgage Payment Ratio

The rent-to-mortgage payment ratio uses the adjusted rent for Minneapolis against a 100% loan-to-value mortgage (30-year fixed) for the median price home using Realtor home sales statistics. It's a lot like a cap rate, but I find it more appealing in ratio form. A ratio of 1.0 means that annual rent is equivalent annual mortgage payments. Values less than 1.0 indicate rents are cheaper and values greater than 1.0 mean mortgage payments are cheaper. Beware, taxes are not considered here. The rent-to-mortgage payment ratio for Minneapolis was 0.96 in December 2013.

Rent-to-Mortgage Payment Dollar Ratio: Realtor

Minneapolis, Minnesota Home Rent-to-Mortgage Payment Ratio History

Date Realtor Adjusted Rent
(Dollar Ratio)
December 2013 0.96
September 2013 0.91
June 2013 0.99
March 2013 1.23
December 2012 1.26
September 2012 1.24
June 2012 1.21
March 2012 1.17
December 2011 1.28

Minneapolis, Minnesota Inferred Affordable Mortgage

The inferred affordable mortgage value is determined by taking the median household income for Minneapolis, Minnesota and calculating the mortgage 30% of that income could afford. Traditionally, 30% of income is the maximum amount a homeowner could use towards a home loan. Inferred affordable loan values are calculated from ACS median household income and average monthly mortgage rates.

Inferred Affordable Mortgage

Minneapolis, Minnesota Inferred Affordable Mortgage History

Date Inferred Mortgage
February 2014 $334,844
January 2014 $329,738
December 2013 $328,576
November 2013 $336,439
October 2013 $339,257
September 2013 $327,421
August 2013 $328,576
July 2013 $332,080
June 2013 $344,172
May 2013 $367,188
April 2013 $371,320
March 2013 $365,825
February 2013 $367,644

1. Specifically, home prices are from the non seasonally adjusted FHFA all-transactions quarterly series. Dollar ratios are calculated using NAR metro prices when available. Rent and income data are from the Census ACS and are carried forward into the following year prior to release of the new data.