With a rise in crime, an uncertain future, and safe neighborhoods just outside the downtown area, it’s a good time to stop renting in Minneapolis and consider moving to a brand-new home in the suburbs.
Here is our case for why we think it’s an excellent time to buy a new home in Minneapolis. To be upfront, this applies to those of you planning to buy and hold, make it a family home or long-term investment.
Safety, Long-term Property Values, Savings Monthly Overtime
Safety isn’t the only incentive. Property values in areas where protests occur seem never to recover, and Minneapolis seems destined to spend decades recovering. Financially, on the personal side, you could save big over time by moving now. If you started to save a hundred dollars a month now, how much money will you have saved in 30-years? Add rent increases to that, a couple of suitable investments, and the answer is a lot!
Low-interest rates remain near all-time lows, and despite the increase in building costs, homebuyers can still find brand new homes for less than rent.
In 2021, the median rent in Minneapolis increased, despite the rise in crime and last year of protests. Minneapolis is a big area, and yes – these are median prices. That said, back to safety above, lower-priced units will be in less attractive and less safe areas of town. It’s likely to be more expensive in safe neighborhoods, just like it is nationwide.
Interest Rates Remain Low, In the Suburbs it’s Safer & Affordable
Still, the long-used argument about interest rates remains. They are low, make owning a home affordable, especially if you’re willing to drive to new, safer neighborhoods in areas where homes are less expensive.
A drive down the expressway will not only put your family in a safer zip code, but you’ll save big on monthly payments. Plus, as you’ll discover, some home builders include extras when you buy a new home.
A snapshot glimpse shows that rent in some areas still exceeds the cost of buying a new construction home miles from the downtown area. The difference can be hundreds of dollars every month.
Families in need of three-plus bedrooms can save hundreds of dollars by purchasing a house outside of Minneapolis. Those families can start earning equity and paying down the mortgage on the home they own.
With violent crime on the rise in downtown areas and talk of eliminating police departments still active, considering a move to a safe neighborhood is a must for many.
For residents that want to stay in the Minneapolis area, there’s never been a better time to look towards the suburbs when buying a new house in Minneapolis.
Minneapolis – Data it Costs More to Rent, Then to Buy in 2021
According to housinglink.org, the median monthly rent for a one-bedroom, two-bedroom, and three-bedroom property in Minneapolis is $1,065, $1,375, and $1,600, respectively. Year-over-year, median monthly rent increased by 1% for a one-bedroom property, 6% for a two-bedroom property, and 3% for a three-bedroom property.
Home prices are rising, too, but you can save hundreds of dollars each month by buying a home.
According to Zillow, the median price of (middle price tier) homes in Minneapolis is $329,763; Google’s mortgage calculator puts the cost of owning a home at this price at $1,560/month.
It’s a little bit “less” but not hundreds of dollars. The significant savings are on homes in safer cities, the quiet places with annual events, brand new communities, and a family-friendly atmosphere.
Remember, we want to stay in the Minneapolis area, and we’re looking to save money on housing expenses over a long period. Communities here offer brand new homes starting from $899/mo for a two-bedroom home and $1,009/month for one with three bedrooms. They’ll pay builder closing costs, and these new homes include upgrades, too. Many other builders offer similarly priced homes and comparable incentives.
Full disclosure, the monthly payments above are with a 20% down payment, which most of us don’t have sitting around. The good news, the average first-time homebuyer in 2020 put down 7%. With our trusty mortgage calculator, that same three-bedroom home will cost about $1,360/month.
With 7% down, you’ll save $200/month on a three-bedroom home in the Minneapolis area. If you buy new, the community above is just one of many new communities with similar opportunities throughout the Minneapolis area.
As we’ve shown, with a little bit of savings, buying is less expensive than renting in Minneapolis (unless your parents have an extra crib laying around).
If you consider rent increases over time, the rising crime rate, and the uncertain future, many people would willingly move outside the city and pay more.
The good news. For now, you can enjoy owning a brand-new home in several different areas around Minneapolis for less than rent.
If you haven’t started saving yet, it’s never too late! Consider a new home outside Minneapolis in any of the area’s beautiful new communities if you already have the downpayment you planned.