Department of Numbers

This section of Department of Numbers is no longer being updated and may be removed in the future. The data here is out of date and should no longer be used.

Minnesota Home Affordability

The data below quantifies Minnesota home affordability by using home prices and home price indices to calculate price-to-income and price-to-rent ratios.1 The maximum affordable loan amount for the median household income is also calculated. You can also compare Minnesota home affordability to other states.

Minnesota Home Price-to-Income Ratios

The home price-to-income ratio for Minnesota comes from the Federal Housing Finance Agency's relatively new state median price series and their purchase only index combined with Minnesota annual median household income data. The FHFA home price series yields a dollar ratio (top chart) while the index results in an index ratio (bottom chart). Based on the latest FHFA state home prices in June 2010, the price-to-income ratio for Minnesota was 3.12.

Home Price-to-Income Dollar Ratio: FHFA

Chart of Minnesota home price-to-income ratio using FHFA median price

Home Price-to-Income Index Ratio: FHFA

Chart of Minnesota home price-to-income ratio using FHFA HPI

Note: Index set to 100 in Q1 of 2000

Minnesota Home Price-to-Income Ratio History

(Dollar Ratio)
(Index Ratio)
December 2013 125.7
September 2013 125.1
June 2013 122.6
March 2013 120.4
December 2012 116.8
September 2012 114.9
June 2012 113.1
March 2012 110.6
December 2011 118.1
September 2011 117.4

Minnesota Home Price-to-Rent Ratios

The price-to-rent ratio for Minnesota is determined for both the FHFA median price and the purchase only index by calculating a ratio with the median contract rent. The price-to-adjusted rent value takes into account CPS reported household size to attempt to correct for quality differences in renter and owner occupied homes. More on that process here. Again, the median price ratio is a dollar ratio and the HPI ratio is an index ratio defined to be 100 in Q1 2000. The adjusted price-to-rent ratio for Minnesota was 16.61 in June 2010.

Home Price-to-Rent Dollar Ratio: FHFA, FHFA Adjusted Rent

Chart of Minnesota home price-to-rent ratio using FHFA median price

Home Price-to-Rent Index Ratio: FHFA

Chart of Minnesota home price-to-rent ratio using FHFA HPI

Note: Index set to 100 in Q1 of 2000

Minnesota Home Price-to-Rent Ratio History

(Dollar Ratio)
FHFA Adjusted
(Dollar Ratio)
(Index Ratio)
December 2013 102.4
September 2013 101.9
June 2013 99.8
March 2013 98.0
December 2012 95.2
September 2012 93.6
June 2012 92.1
March 2012 90.1
December 2011 92.9

Minnesota Inferred Affordable Mortgage

The inferred affordable mortgage is determined by taking the median household income for 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 median household income and average monthly mortgage rates. The amounts are not adjusted for inflation.

Inferred Affordable Mortgage

Chart of Minnesota maximum affordable home loan amount

Minnesota Inferred Affordable Mortgage History

Date Inferred Mortgage
February 2014 $312,176
January 2014 $307,416
December 2013 $306,333
November 2013 $313,663
October 2013 $316,291
September 2013 $305,255
August 2013 $306,333
July 2013 $309,599
June 2013 $320,872
May 2013 $342,330
April 2013 $346,183
March 2013 $341,060
February 2013 $342,755

1. Specifically, Home prices are from the FHFA seasonally adjusted, purchase only quarterly series. Rent data is from the Census ACS and income is from the Census CPS. Rent and income data for the previous year is carried into the following year for calculations prior to release of new data.