Workforce Housing Summit Discusses Real Estate Challenges

(KNSI) – Experts at Thursday’s workforce housing summit in St. Cloud presented on how quickly the real estate picture has changed locally.

Minnesota Department of Employment and Economic Development Regional Labor Market Analyst Luke Greiner tells KNSI’s Dan Ochsner it’s a product of rapidly rising home prices and exploding costs to borrow.

“Let’s say you were looking at a $200,000 home in 2019. That would take roughly a $1,300 a month mortgage. To buy that exact same house last year in 2022, with increased price in the home and then with the interest rate hikes, roughly 6.5%… It increases your monthly mortgage by $1,000 a month.”

Greiner says a family budget where both parents make the median wage can afford a home that costs around $150,000, which is impossible to find. He says even when you adjust for college students and other workers who are not looking to purchase a home, the situation is stark at the moment.

Greiner says nearly half of renters are feeling financial stress too.

“It’s just insane. About 42% of the population is what we would consider burdened by rent meaning they pay 30% or more of their income on rent.”

Greiner notes that if you are spending a substantial portion of your paycheck on an apartment or rental property, it becomes impossible to put aside money to buy a home someday. Greiner says it also makes them vulnerable to unexpected costs like a medical emergency or other ‘rainy day’ situations.

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