Report: Foreclosures rise sharply in Minnesotaby Elizabeth Dunbar, Minnesota Public Radio
St. Paul, Minn. — Minnesota recorded more than 6,700 foreclosures in the first three months of 2010, the highest number since mid-2008, according to a report released Monday by the Minnesota Housing Partnership.
The number of homeowners receiving pre-foreclosure notices also rose in the first quarter of 2010 to 18,412, which means the number of foreclosures could remain high in the coming months.
While average monthly rent was down slightly at $900, officials at the Minnesota Housing Partnership said it is still high.
"It's a tough situation for people that have lost their job or have downgraded their job in that rents are still high and people are having a very hard time covering mortgage payments," said Chip Halbach, executive director of the Minnesota Housing Partnership.
There were signs of improvement, however. The mortgage delinquency rate declined for the first time since the beginning of 2007, and vacancy rates in the Twin Cities rental market fell.
The Minnesota Housing Partnership also noted that while the number of jobs in the housing construction industry was down, the state's unemployment rate held steady.
But Halbach said the housing situation won't improve without an economic turnaround. One in eight Minnesotans spends more than half of his or her income on housing, which isn't sustainable, he said.
"This very deep recession with sustained unemployment, decline in weekly income, is having an impact in housing that is very significant and much different than we've seen in a long time," he said.
The federal government has implemented a number of programs for struggling homeowners and the unemployed that have helped offset some of the discouraging numbers, Halbach said. But unless the economy improves, the numbers could get worse if Congress doesn't renew the programs, he said.
"Looking forward it's not clear," he said.
The report said homelessness is an ongoing problem, especially in the Twin Cities. An average of 195 families was counted as homeless in Hennepin County shelters during the first quarter of 2010. That number is similar to the number of families counted as homeless at the same time last year.
The Minneapolis and St. Paul school districts also identify the number of children who are homeless. That number rose by 6 percent over a year ago.