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Best Cities for Homeownership in Minnesota

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Homes continue to appreciate in Minnesota: In the last five years, home values in the state have increased by 31.84%, according to the Federal Housing Finance Agency. From 2017 to 2018 alone, houses appreciated by 6.50%. Aside from housing investments paying off for homeowners, the “Land of 10,000 Lakes” offers other aspects that positively affect overall quality of life, like having one of the better unemployment rates in the nation (ranked 13th lowest in February) and commute times on the shorter end.

Maybe that’s why 72% of the homes in Minnesota were owner-occupied as of 2017. To get a further picture of homeownership in Minnesota: The median value of homes was $199,700, and homeowners paid an average of about $1,506 in monthly housing costs.

Of course, some Minnesota areas offer homeowners more than others. To determine the best cities for homeownership, LendingTree gathered metrics provided by the U.S. Census Bureau that shine a light on what homeownership is like in the state’s metro and micro areas, measuring everything from median home value to average commute time to the change in housing costs over a five-year period — all of which affect the financial and general well-being of homeowners.

We then compared all the data to compose this list of the best Minnesota cities for homeownership. Nine out of the 10 areas on this list enjoyed home value appreciation. Here is what else we found.

Key findings:

  • The metro area of Fargo, N.D., and its surrounding towns in both North Dakota and Minnesota is the best place for homeownership in Minnesota. It had a high median home value ($198,800), low unemployment (2.7%), a short average commute time (16.7 minutes) and increasing home values (22.04%) from 2013 to 2017.
  • The Minneapolis–St. Paul–Bloomington Metro Area came in seventh on this list. It had the highest median home value ($234,900), low unemployment (4.3%) and increasing home values paired with decreasing housing costs from 2013 to 2017 (6.68% and -2.26%, respectively). The area’s longest average commute on our Minnesota list — 25.3 minutes — kept it from ranking higher.
  • The Duluth Metro Area was the worst place in Minnesota for homeownership in our review. It has a low median home value for the state ($157,000), higher unemployment (5%) and a slight increase in monthly housing costs from 2013 to 2017 (1.81%).

The best cities for homeownership in Minnesota

1. Fargo, N.D.

While the Oscar-winning movie “Fargo” might have put Fargo, N.D., and its surrounding towns on the map, it’s the return on housing investment that has homeowners flocking to the area. Fargo is ranked No. 1 on this list for a number of reasons. From 2013 to 2017, Fargo had the greatest housing appreciation on this list, at 22.04%, and homes here are valued second-highest in the state, at a median $198,800. On the other hand, the city’s unemployment rate was on the lower end at 2.7%, as of 2017. The commute time is also on the light end, at 16.7 minutes — much lower than the national average of 26.9 minutes in 2017, according to the U.S. Census Bureau. Because of all these benefits for homeowners, monthly housing costs are up 2.17% in recent years, which also happens to be the biggest change in home costs on this list.

2. Grand Forks, N.D. metro area

In the metro area of Grand Forks, N.D., and surrounding Minnesota towns, the homes are valued at a median $180,000, and the appreciation of their worth is the second-highest on this list at 18.89%. Monthly housing costs experienced a minuscule 0.43% increase from 2013 to 3017. Residents here spend about 15.4 minutes traveling to work, and the unemployment rate is 3.7%.

3. New Ulm Micro Area

In the southwestern part of Minnesota is the New Ulm Micro Area, where more than 75% of residents owned their homes, as of 2017. The median home value here is $140,000, and homeowners spend about $1,127 monthly on their mortgage and other housing costs — about a 0.36% increase from 2013 to 2017. In this time, home values appreciated by 7.94%. The unemployment rate in New Ulm is 2.3%; those with jobs spend an average of about 15 minutes traveling to work.

4. Alexandria

The homes in Alexandria are valued on the higher end for the state, with a median value of $197,100. The area’s homes appreciated by 5.74% and housing costs went up 1.92% from 2013 to 2017. The unemployment rate in Alexandria is 3.1% and residents spend 17.7 minutes commuting to work.

5. Rochester

In the third-largest city in Minnesota, homes in Rochester are on the higher end of this list, with a median value of $184,900. Homes appreciated by 8.32% and housing costs went up by 0.56% from 2013 to 2017. The unemployment rate here was 3.9% at the time of our survey, and residents spend an average of 19.6 minutes traveling to work.

6. Mankato-North Mankato

Homes in Mankato–North Mankato are valued at a median of $178,100. From 2013 to 2017, homes appreciated and monthly housing costs increased by 6.77% and 0.63%, respectively. The unemployment rate is the second-highest on this list at 4.2%. Residents here spend an average of 17.5 minutes commuting to and from work.

7. Minneapolis-St. Paul-Bloomington

Minneapolis–St. Paul–Bloomington includes what’s known as the Twin Cities, the most populous area in the state, and the state capital in St. Paul. The median home values here are the highest on this list at $234,900. Homeowners enjoyed a home value appreciation of 6.68%, while housing costs went down 2.26% from 2013 to 2017. The unemployment rate is highest in our Top 10 at 4.3%. Residents here also spend the longest time commuting for work at an average of just over 25 minutes.

8. Marshall Micro Area

The Marshall Micro Area has the second-lowest median home value on this list at $135,800. It is the only area in our Top 10 that experienced a drop in home values from 2013 to 2017 (-3.62%). Housing costs fell in the same period by 2.43%. The unemployment rate here is 3.6%, and the commute time is on the shorter side, 15.2 minutes.

9. Wahpeton, N.D.

Homes in Wahpeton, N.D., and surrounding Minnesota towns had the lowest value on this list at a median $128,100. The area also has the lowest unemployment rate on this list at 2.2%. Homeowners here enjoyed doubt-digit home value appreciation by 14.17%, but housing costs also increased by 1.29%. Residents spent 18.3 minutes traveling to work.

10. Willman Micro Area

The Willmar Micro Area has nearly 60% homeownership, according to the U.S. Census Bureau, and homeowners here spend a median $1,110 on housing costs. The median home value in Willmar was $167,800, a 3.20% appreciation from 2013 to 2017. At the same time, housing costs also grew a little, by 0.50%. There is a 3% unemployment rate, and residents spend an average of almost 18 minutes traveling to work.

Homebuying tips for Minnesota

If a home in Minnesota sounds like a Midwestern dream to you, now might be the time to buy because home prices are rising fast, according to data compiled by the Federal Reserve Bank of Minneapolis. The median home value in Minnesota was $199,700 as of 2017, which is plenty affordable when compared with higher home prices in coastal U.S. cities, but that’s still a bit higher than the nation’s median home value of $193,500. Nine out of the 10 cities above also showed home value appreciation in the period studied, three of which experienced double-digit growth.

Before going shopping for homes, homebuyers should first create a wishlist to determine what kind of home they want. This sample wish list is created by the state’s housing finance agency, Minnesota Housing, and includes questions like “Do you have to be close to public transportation?” and “How much renovation would you be willing to do?” to help narrow all the options. Next, homebuyers should get familiar with different neighborhoods to determine where they want to live. If it’s one of the areas on this list, then you now know the basics about the area’s living standard. However, there are even more factors to consider that are important to one’s quality of life, like neighborhood friendliness and school options.

Once you know a bit about the kind of house you want, determine how much house you can afford. In Minnesota’s hot housing market, consider getting preapproved by a lender. Doing so will provide you with a letter stating the estimated loan amount and mortgage rate you qualify for, which will in turn make sellers take you more seriously as a buyer. You can also use this FannieMae calculator to determine estimated mortgage payments on homes you’re interested in.

When it comes to the down payment, the conventional wisdom is to put aside 20% of the home’s value, but if you’d rather not use up all of your savings, Minnesota Housing offers down payment loans that require as little as 0% to 3.5% down. First-time homebuyers can take advantage of the Start Up program, which offers conventional loans that only require a 3% down payment. That program can be combined with a deferred payment loan with no interest or monthly payments. Homeowners must pay off the deferred payment loan when they move, sell or refinance. For Minnesota’s repeat homebuyers, the Step Up program helps current homeowners refinance their home or buy a new one.

The journey to homeownership can be long and winding. In recognition of this, the nonprofit Minnesota Homeownership Center provides advice from homeownership advisers and homebuying education resources, including classroom workshops and online courses that can help you navigate every step of the journey.


The methodology for this study was simple and straightforward.

1: Collect metropolitan statistical areas (“MSAs”) and micropolitan statistical area from the U.S. Census Bureau using 2017 population data.

2: Each MSA and micropolitan statistical area was ranked on a scale from 24 (Best) to 1 (Worst) for five different metrics. Those metrics are:

Median Home Value(24-Highest Value, 1-Lowest Value)

Unemployment Rate(24-Lowest Rate, 1-Highest Rate)

Average Commute Time(24-Shortest Time, 1-Longest Time)

Median Home Value Appreciation (2013-2017)(24-Greatest Appreciation, 1-Smallest Appreciation)

Median Change in Yearly Housing Costs (2013-2017)(24-Smallest Cost Change, 1-Greatest Positive Cost Change) – The formula for this metric is

(((Monthly Housing Costs for 2017 *12)+(Real Estate Tax for 2017))/ ((Monthly Housing Costs for 2013 *12)+(Real Estate Tax for 2013))-1)

3: An average score was then calculated for each MSA, based upon the scores received for each metric.

4: The MSAs and micropolitan statistical areas were then ranked on a scale of 1 (Best) to 24 (Worst), based on their average score.

5: All metrics were ranked equally.


All data were obtained from the U.S. Census Bureau. More information on where the data came from is provided below:

2017 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filtered for Financial Characteristics for housing units with a mortgage — 2013-2017 American Community Survey 5-Year Estimates

2017 Unemployment Rate and Median Commute Time

  • Filtered for all MSAs
  • Then filtered for Selected Economic Characteristics — 2013-2017 American Community Survey 5-Year Estimates

2013 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filtered for Financial Characteristics for housing units with a mortgage — 2013-2017 American Community Survey 5-Year Estimates

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