By Tom Dunlap
Minnesota’s population has increased every year over the past decade, with a growth rate of 2.2% from 2010 to 2013, according to the U.S. Census Bureau. Many suburbs surrounding the Twin Cities — Minneapolis and St. Paul — continue to grow at rates of more than 3% a year.
NerdWallet crunched the numbers for the 96 Minnesota cities with more than 10,000 residents to find the best cities for homeownership in the state. Here’s what the best cities had in common:
- All of the top 20 cities were within commuting distance of the Twin Cities of Minneapolis and St. Paul.
- 19 of the top 20 cities had homeownership rates above 80%, meaning that the vast majority of homes in these cities are owned, rather than rented.
- In all 20 of the best cities for homeownership in Minnesota, homeowners earning the median income spent less than 30% of their income on their homes, which is the affordability standard set by the U.S. Department of Housing and Urban Development.
It’s easy to see why so many are moving in: The state, known as the “Land of 10,000 Lakes,” offers numerous outdoor activities, plenty of job opportunities and, for first-time homebuyers who qualify, the Minnesota Housing Finance Agency offers a statewide network of participating lenders to help buyers find affordable, fixed-rate loans.
Our analysis to find the best cities for homeownership in Minnesota answers three questions:
1. Are homes available? We looked at the area’s homeownership rate to determine the availability of homes. A low homeownership rate is likely a signal of competitive inventory, more options for renters rather than buyers and expensive housing. Areas with a high homeownership rate led to a higher overall score.
2. Can you afford to live there? We looked at median household income, monthly homeowner costs and median home value to assess affordability and determine whether residents could live comfortably in the area. We used monthly homeowner costs to measure cost of living. Areas with high median incomes and low cost of living scored higher. Are you thinking about buying a home? Learn more about current mortgage rates and mortgage refinancing options in our mortgage guide, as well as whether it’s best to rent or buy.
3. Is the area growing? We measured population growth to ensure that the area is attracting new residents and showing signs of solid growth. This is likely a signal of a robust local economy, which is another attractive characteristic for homebuyers.
For more details about our methodology, please see the section at the end of the report.
Rogers is in Hennepin County, one of many suburbs northwest of the Minneapolis-St. Paul metropolitan area. In this city, 84.4% of all homes are owned rather than rented, and monthly homeowner costs take up 24.5% of median household income, according to the U.S. Census Bureau. The population skyrocketed by 31% from 2010 to 2012 after Rogers annexed surrounding Hassan Township in 2012. For summer fun, the city hosts the Rockin’ Rogers Days in June, a citywide celebration with a classic car show, carnival and parade.
Otsego, located 8 miles north of Rogers, grew 7.9% from 2010 to 2012. Otsego has the second-highest homeownership rate on our list — 94.3% — and the second-lowest median home value on our list at $195,300. Residents spend 28.1% of their monthly median household income on homeowner costs. Otsego is over 30 miles northwest of the Twin Cities, home of large employers such as the Minnesota state government, Mayo Clinic, Target Corp. and 3M Co.
Hugo, another suburb of the Twin Cities, is 18 miles northeast of St. Paul on Highway 61. In this city, 90% of homes are owned by their occupants, and monthly homeownership costs take 25.9% of the median household income of $6,614. Hugo is home to Oneka Lake and bigger lakes to the south, including White Bear Lake. Both lakes are known as great places to catch bass — once the cold winter months have passed.
Farmington is 33 miles south of St. Paul and the median home value here is $210,100. Farmington is home to the Minneapolis Air Route Traffic Control Center and a Marigold Kemps packing plant. Farmington hosts the annual Dakota County Fair — the largest county fair in the state — with average attendance of 125,000 each year.
5. St. Michael
St. Michael is located 30 miles west of Minneapolis. It is a growing community with a 5.7% population increase from 2010 to 2012, and it has a high homeownership rate at 91.4%. The Crow River flows along the city’s eastern border and separates it from Rogers, which tops our list. The Crow-Hassan Park Reserve, along the banks of the Crow River, is a 2,600-acre park with a 600-acre restored prairie, horseback riding and hiking trails, room to walk your dog and an off-leash exercise area.
Anoka County’s Ramsey is another suburb northwest of Minneapolis. Homeowners spend 25.4% of their median monthly income on their houses, which are valued at $220,800. Ramsey’s business district has added more than 1.7 million square feet of industrial space since 1995, and is planning a retail area that will include shopping, restaurants and entertainment options, according to city officials. Connexus Energy is the biggest employer in Ramsey.
7. Maple Grove
Maple Grove — 20 minutes north of Minneapolis — is in the Twin Cities metro area. In this city, 87.6% of all homes are owned rather than rented, and monthly homeowner costs are the lowest on our list, taking up just 23.2% of median household income. The city boasts more than 1,000 businesses operating within its borders. Residents stay busy visiting the city’s parks and trails, as well as 48 playgrounds for kids.
In Andover, 93% of homes are owned by their occupants, and monthly homeownership costs take up 24.7% of median household income, which is $7,437. In recent years, about 50 new homes have been built each year in Andover, with a variety of lot sizes, styles and prices, according to the Andover city government. Andover boasts more than 400 acres of community and neighborhood parks. One of the top destinations is Kelsey Round Lake Park, a 136-acre nature area for hiking, skiing and other activities.
9. East Bethel
North of Andover is the suburb of East Bethel, where 95% of all homes are owned rather than rented, which is the highest percentage on our list.. The suburb features 12 lakes, including Coon Lake, which is the county’s largest lake and popular with anglers, water skiers and swimmers.
10. Lino Lakes
Southeast of East Bethel is Lino Lakes, another suburb of Minneapolis-St. Paul. In Lino Lakes, monthly homeowner costs take up 24.1% of the median household income, which is $8,183. The city is home to the 3,500-acre Rice Creek Chain of Lakes Park Reserve and its popular Rice Creek Water Trail, a perfect place to take your kayak or canoe for a day trip on the 22-mile waterway.
|Rank||City||Nearest Big City||Home Ownership Rate||Median Selected Monthly Homeowner Costs||Median Monthly Household Income||Homeowner Costs as a Percentage of Household Income||Median Home Values||2010-2012 Population Growth||Overall Score for Home Owners|
|10||Lino Lakes||St. Paul||93.2%||$1,971||$8,183||24.1%||$269,300||2.5%||58.8|
|15||Cottage Grove||St. Paul||88.9%||$1,732||$6,842||25.3%||$217,000||1.8%||57.6|
|17||Big Lake||St. Cloud||81.7%||$1,641||$5,528||29.7%||$171,600||3.8%||54.9|
For a full list of all 96 cities evaluated for this analysis and to download the data, click here.
The overall score for each city was derived from each of these measures:
1. Homeownership rate made up 33.3% of the total score. A higher rate earned a higher score. The rate comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.
2. Selected monthly owner costs as a percentage of median household income made up 16.7% of the total score. A lower percentage earned a higher score. Monthly homeowner costs as a percentage of median household income made up one-half of the affordability score. Median household income comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 03. The figure for monthly homeowner costs comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.
3. Median home value made up 16.7% of the total score. A lower value earned a higher score. Median home value made up one-half of the affordability score. Median home value comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.
4. Population change from 2010 to 2012 made up 33.3% of the total score. A higher percent change earned a higher score. The 2010 population comes from the 2010 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. The 2012 population data comes from the 2012 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. NerdWallet calculated the percent change.
Only cities with 10,000 or more residents were included in the study.
Image: Doug Kerr/Flickr: https://flic.kr/p/aqQ59i