BISMARCK, ND – October 13, 2010 – (RealEstateRama) — North Dakota has made progress, but there are still more challenges to be faced in making housing more affordable in the state, according to a report released by the North Dakota Housing Finance Agency (NDHFA).
“North Dakota is fortunate. The state has experienced positive growth in a variety of economic areas –increasing home values and income, and enviably low unemployment,” said Mike Anderson, NDHFA executive director. “While we are closing the housing affordability gap in North Dakota, we still have a ways to go.”
The 2010 “State of Affordable Housing in North Dakota” report illustrates a continued need for housing that is affordable to households at all income levels. Men and women working in several common occupations – found in every community – often pay more than 30 percent of their income for housing, which is a generally-accepted guideline for housing affordability.
“Workers at all skill levels and in all wage ranges are needed in North Dakota communities,” said Anderson. “Without housing options for households of modest means, a community cannot grow and prosper.”
Statewide, an hourly wage of $10.35 is needed to make a $539 per month rent payment on a two-bedroom apartment. Typically low-wage earners such as retail salespeople, grocery store cashiers, and restaurant employees struggle to reasonably afford their housing costs. Retired workers may also find it a challenge to pay housing costs. If lacking another source of income than Social Security, the average retiree only has $322 to put toward monthly housing expenses.
The report also looks at the cost of single-family housing, and while home value increases have moderated, they are still outpacing increases in household income. From 2007 to 2008, home values increased 5.4 percent and income grew at a rate of 4.4 percent. These more equitable increases help reduce the housing affordability gap.
“Our greatest areas of concern are in the energy-impacted areas of western North Dakota where housing demand exceeds supply,” said Anderson. “The availability of housing appears to be affecting affordability. We anticipate that as public and private investment in housing increases supply, those market conditions should start to normalize.”
The greatest home price increases were found in the Williston area where the average house sold for $72,000 in 2005 and more than $110,000 in 2007, and in the Minot area where homes sold for $112,000 on average in 2007 and $144,000 in 2009.
A recent Department of Commerce report notes that more than 1,000 new units are in the pipeline in Williston including approximately 848 new units permitted or under construction in 2010-11. A contractor in Dickinson has nearly 500 housing units planned with other developers proposing an additional 250 homes. State and local officials are continuing their work to attract investors to meet the housing needs in the region.
“Much of the focus in the discussion of housing in North Dakota has been on shortages, particularly in western North Dakota,” said Anderson. “The intent of our report is to provide a comparison between income and cost for ”Main Street” employed households across the state.”
NDHFA together with the Grand Forks Office of Urban Development and the Grand Forks Housing Authority, the ND Association of Builders, ND Association of Realtors, ND Department of Commerce, and the USDA Rural Development – ND State Office sponsored the report.
Questions regarding the report can be directed to Mike Anderson at (701) 328-8080, (800) 292-8621, (800) 366-6888 (TTY) or info (at) ndhfa (dot) org.
