Southeast Minnesota is a health care and agricultural powerhouse. The region is home to the renowned Mayo Clinic and some of the world's most recognized food companies and brands.
Advanced manufacturing is especially strong here, with machinery, chemicals, and electronics among the top products.
Want the freshest data delivered by email? Subscribe to our regional newsletters.
1/26/2024 9:00:00 AM
Amanda O'Connell
The ongoing challenge of limited and unaffordable housing significantly affects the workforce, which is particularly evident when there are numerous job openings in a particular area. The need for more affordable housing in the area can make it challenging to fill these positions, due to a lack of new workers who are able to live near the available employment.
According to recently released American Community Survey data from the Census Bureau shows that Southeast Minnesota had a total of just over 220,500 housing units in 2022. Of these, about 206,000 units are currently occupied, representing 93.5% of the total housing. This leaves a small margin of just 14,000 units, or 6.5%, that are vacant and potentially available for new residents, which is 3% lower than the state of Minnesota as a whole. Such a low vacancy rate can pose a challenge for attracting and accommodating a growing workforce in the area.
| Table 1. Housing Characteristics in Southeast Minnesota | ||
|---|---|---|
| County | Occupied Housing Units | Vacant Housing Units |
| Dodge County | 93.9% | 6.1% |
| Fillmore County | 88.0% | 12.0% |
| Freeborn County | 91.1% | 8.9% |
| Goodhue County | 93.9% | 6.1% |
| Houston County | 92.0% | 8.0% |
| Mower County | 92.4% | 7.6% |
| Olmsted County | 95.3% | 4.7% |
| Rice County | 92.8% | 7.2% |
| Steele County | 95.4% | 4.6% |
| Wabasha County | 90.6% | 9.4% |
| Winona County | 93.1% | 6.9% |
| Southeast Minnesota | 93.5% | 6.5% |
| Minnesota | 90.5% | 9.5% |
| Source: American Community Survey, 2018-2022 | ||
Of the 11 counties in Southeast Minnesota, Steele County has the lowest percentage of vacant housing units, sitting at 4.6%, or just 720 total vacant units, followed by Olmsted (4.7% or 3,246 vacant housing units), Dodge (6.1% or 507 housing units), and Goodhue County (6.1% or 1,272 vacant housing units). The highest percentage of vacant housing units is found in Fillmore (12% or 1,149 vacant units), Wabasha (9.4% or 954 vacant housing units), and Freeborn County (8.9% or 1,260 vacant units).
People often choose to rent housing due to affordability, flexibility, and lower responsibility for maintenance, which can be especially appealing for those not ready for the long-term commitment of home ownership. In Southeast Minnesota, of the 206,181 occupied housing units, 24.9% are renter occupied. The highest monthly median rents paid are found in Olmsted ($1,193), Rice ($1,021), and Steele County ($914). The lowest monthly median rents are found in Fillmore ($724), Wabasha ($803), and Freeborn County ($803).
In Southeast Minnesota, 46.7% of occupied units are cost burdened, meaning they pay over 30% of their income on housing. This figure is slightly higher than the state of Minnesota, where 46.6% of occupied units face similar cost burdens. Southeast Minnesota faces slightly higher housing affordability challenges than the state, possibly leading to more financial stress for residents and affecting their economic stability and decisions about jobs, savings and engagement in their communities.
About 155,000 units, or 75.1% of units in Southeast Minnesota, are owner occupied. Of those, 61.3% of the units have a mortgage. Over half of mortgages (56%) range from $1,000 to $1,999. A little over 22% of mortgages cost $2,000 to $2,999, while just 8.4% cost $3,000 or more (Figure 2).
Data indicates that housing units with a mortgage spend less of a percentage of household income on housing than renters. Just over half (53.5%) of housing units with a mortgage spend less than 20% of their household income on housing costs. Furthermore, 25.7% of households spend 20% to 29.9% of their income on housing, while 20.8% allocate 30% or more of their income to housing expenses.
Monthly owner cost as a percentage of household incomes differs by county in Southeast Minnesota. Olmsted County has the highest percentage (57.5%) of households that pay less than 20% of their household income on housing costs, followed by Steele (56.6%) and Mower County (55.6%). On the other side of the spectrum, Rice has the highest percentage (25.8%) of households that pay more than 30% or more on their housing, followed by Wabasha (25.7%), Fillmore and Houston County (22.5%).
| Table 2. Monthly Owner Costs as a Percentage of Household Income - Housing with a Mortgage | |||||
|---|---|---|---|---|---|
| County | Less than 20.0% | 20.0 to 24.9% | 25.0 to 29.9% | 30.0 to 34.9% | 35.0% or more |
| Dodge County | 52.7% | 18.3% | 8.3% | 7.9% | 12.9% |
| Fillmore County | 54.8% | 14.4% | 8.3% | 5.8% | 16.6% |
| Freeborn County | 54.3% | 14.4% | 9.0% | 6.5% | 15.7% |
| Goodhue County | 48.7% | 18.3% | 10.9% | 5.7% | 16.4% |
| Houston County | 51.0% | 15.2% | 11.3% | 8.7% | 13.8% |
| Mower County | 55.6% | 14.2% | 10.1% | 6.2% | 13.9% |
| Olmsted County | 57.5% | 14.6% | 10.5% | 5.2% | 12.1% |
| Rice County | 46.5% | 16.8% | 10.9% | 8.0% | 17.8% |
| Steele County | 56.6% | 13.5% | 11.0% | 5.5% | 13.5% |
| Wabasha County | 46.6% | 17.8% | 9.9% | 5.3% | 20.5% |
| Winona County | 53.0% | 14.9% | 10.0% | 6.5% | 15.6% |
| Southeast MN | 53.5% | 15.4% | 10.3% | 6.2% | 14.6% |
| Minnesota | 52.0% | 16.0% | 10.0% | 6.1% | 15.8% |
| Source: American Community Survey, 2018-2022 | |||||
In Southeast Minnesota, the housing market is characterized by high demand, with renters particularly facing considerable financial challenges. While homeowners generally have a lower cost burden, disparities exist across counties. These challenges highlight the need for targeted housing policies to improve affordability and support renters and homeowners, ensuring regional economic stability and growth.
Contact Amanda O'Connell, Labor Market Analyst, at amanda.oconnell@state.mn.us.
