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U.S Department of Housing and Urban Development

Spotlight on the Housing Market
in the St. Louis, MO-IL MSA

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | October 2014

The St. Louis, MO-IL Metropolitan Statistical Area (St. Louis MSA) is located along the Mississippi River and includes the Independent city
of St. Louis, MO, 14 counties (six in Missouri and eight in Illinois) and Sullivan City, MO (part of Crawford county). The foreclosure crisis
was less severe than in some areas of the nation, but the recovery from the crisis and subsequent recession has been slower than nationally.
Home prices appreciated at only half the national rate during the housing bubble, but the decline in prices was nearly as sharp. The lower
property values and the resulting underwater mortgages were partially fueled by investor speculation and excess housing construction going
into the crisis, but mainly by unsustainable mortgage lending. The rise in unemployment during the recession added further to rising defaults
and the decline in property values. The share of mortgages at risk of foreclosure (those 90 or more days delinquent or in the foreclosure
process) peaked at the beginning of 2010, the same as for the nation, but at a much lower rate. A partial explanation for the lower share
of distressed mortgages in the foreclosure pipeline is the lower foreclosure processing time in Missouri--an average of 285 days compared
to 577 nationally--although the foreclosure processing timeline in Illinois is high at 850 days. The share of mortgages at risk of foreclosure
has begun to decline in St. Louis–the result of four years of modest job growth, fairly stable gains in home prices and local legislation that
curtailed foreclosure actions. The need for recovery efforts continues, however, as St. Louis ranks high among metropolitan areas for the share
of mortgages that remain underwater or near underwater. The Administration’s broad approach to stabilizing the housing market has been a
real help to homeowners in St. Louis and the surrounding area. This addendum to the Obama Administration’s Housing Scorecard provides a
summary of local economic trends and conditions and the impact of the Administration’s efforts to stabilize the housing market and help local
homeowners.

Population Growth, Employment,
and Housing Market:

With more than 2.7 million people according to the most
recent Census, the St. Louis MSA is the 19th largest in the
nation. From 2000 to 2010, the population increased by an
average of 11,250 people, or 0.4 percent, a year. Natural
population growth (births minus deaths) accounted for nearly
100 percent of population growth during this period. An
average of only 20 people per year moved to the St. Louis
MSA during the last decade, accounting for a very small
percentage of the net population increase.
St. Louis MSA Housing Unit Growth Outpaced Population and
Household Growth During the Past Decade
Date of Census

4/1/2000

4/1/2010

St. Louis MSA Population

2,675,343

2,787,701

Annual Growth Rate

-

Annual Growth Rate

0.4%

1,012,419

St. Louis MSA Households

1,119,020

-

1,236,222

-

Annual Growth Rate
Source: Census Bureau (2000 and 2010 Decennial)

1.1%

1,092,915

St. Louis MSA Housing Units

1.3%

During the decade spanned by the Census, new housing
production exceeded household growth in St. Louis. Net annual
housing unit growth of 1.3 percent in the St. Louis metropolitan area during
the last decade was greater than the corresponding population and household
growth rates of 0.4 and 1.1 percent, respectively. According to the Census
Bureau, the rate of increase in vacant units in the St. Louis metro area during the
2000s was slightly higher than the national rate, with vacant units increasing at
an average annual rate of 4.6 percent, compared with 4.4 percent nationally.
Investor speculation stimulated some overbuilding in the years leading up to
the housing crisis, but the increase in the share of investor purchases remained
below the national upturn. Specifically, from 2000 to 2005 investor home sales
rose from 5.5 to 8.3 percent of total sales in the St. Louis metro area, while the
corresponding increase for the nation was from 8.0 to 14.6 percent. Subprime
lending also contributed to overbuilding in the St. Louis MSA. A study by the
National Bureau of Economic Research indicates that the St. Louis MSA ranked
35th out of the top 107 metros with the highest share of subprime originations
during 2005, with subprime originations as a share of new mortgages at 21
percent in St. Louis. A conservative estimate based on HMDA (Home Mortgage
Disclosure Act) data indicates that high-cost (proxy for subprime) originations
tripled nationally between 1998 and 2005, while a study by the Center for
Responsible Lending estimates that approximately 90 percent of subprime
mortgages during that period faced increases in monthly payments of 30 to

Spotlight on the Housing Market in the St. Louis, MO-IL MSA | Page 1

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | October 2014
50 percent within a few years, causing subprime loans
to typically default at more than 7 times the rate of other
mortgages.
St. Louis’ economy is improving. The local economy
was growing slowly before it began to decline in 2008.
From the second quarter of 2004 through the first quarter
of 2008, jobs increased at an average annual rate of 1.0
percent, compared with a national increase of 1.4 percent
during the same period. The impact of the Great Recession
was not quite as severe for the St. Louis metropolitan area as
it was for the nation. Jobs in the MSA declined at an annual
rate of 2.8 percent, from the second quarter of 2008 through
the first quarter of 2010, compared with a national decline
of 3.1 percent. The recovery from the recession has been
weaker for the St. Louis MSA than for the nation, however,
with jobs increasing at an annual rate of 0.7 percent from the
second quarter of 2010 through the second quarter of 2014,
compared with a 1.6-percent increase nationally.
The St. Louis MSA is home to several large hospitals and
institutions of higher learning. During the recent recession,
a period when every other private sector in the MSA lost
jobs, the education and health services sector expanded
at an average annual rate of 2.9 percent. Job losses were
most severe during this period in the construction and
manufacturing sectors, which declined at annual rates of 13.2
and 9.4 percent, respectively; job losses were also fairly
substantial in the professional and business services sector
(3.7 percent). The recovery from the recession has been led
by the leisure and hospitality and professional and business
services sectors, which expanded by respective annual rates
of 3.6 and 3.0 percent. Gains in the education and health
services sector continued, but slowed to an average rate
of 1.3 percent during this period. Growth in these sectors
was offset by average annual job losses of 6.1 percent in
the state government and 4.4 percent in other services. The
unemployment rate for the St. Louis MSA peaked at 10.4
percent in December 2009 and has since fallen to 6.5
percent as of September 2014. The national unemployment
rate peaked in October 2009 at 10.0 percent, falling to 5.9
percent by September 2014.
Home sales in St. Louis have improved, but
slowed somewhat in 2014. After reaching a peak of
77,200 units sold in 2004, purchases of existing homes in the
St. Louis metropolitan area declined by an average annual
rate of 7 percent between 2005 and 2011. Existing home
sales began to rise again in 2012 and 2013, increasing
at an annual rate of 12 percent (although on a much lower
base), but sales so far in 2014 have declined by 9 percent

to an annual pace of 45,300. By comparison, existing home sales in the nation
peaked in 2005 and declined by an annual rate of 14 percent between 2006
and 2008; existing home sales began to rise in 2009, increasing at an average
annual rate of 3 percent from 2009 to 2014. Purchases of new homes in the St.
Louis MSA peaked in 2005 at 9,700 units, before falling from 2006 through
2011 at an annual rate of 12 percent. New home sales increased at an average
annual rate of 16 percent (albeit on a low base) in 2012 and 2013, but the pace

Spotlight on the Housing Market in the St. Louis, MO-IL MSA | Page 2

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | October 2014
in 2014 has fallen 14 percent to an annual pace of 2,800
units sold. Nationally, new home sales also peaked in 2005
before declining by an annual rate of almost 13 percent from
2006 through 2011; sales have increased since at an annual
rate of 14 percent (also on a low base) from 2012 through
2014.
Home prices in St. Louis rose less steeply than for
the nation but nonetheless experienced a sharp
decline. The CoreLogic repeat-sales house price index (HPI)
shows that home prices in the St. Louis MSA rose at half the
pace of the rest of the nation during the housing bubble but
still fell 24 percent from their peak in September 2006 to
their low in February 2012. The national peak-to-low decline
was 33 percent (from April 2006 to March 2011). Investor
speculation had less of an impact on the rise in home prices in
the St. Louis MSA, with sales to investors averaging 8 percent
in St. Louis during the bubble–much lower than the 13 percent
share nationally. As described earlier, subprime lending was
also a factor in fueling home prices in the St. Louis MSA.
Since reaching their low point, home prices have risen 17
percent in the St. Louis metropolitan area--about half the 31
percent low-to-current increase for the nation. Home values in
the St. Louis MSA are currently on par with prices in mid-2004.
The apartment vacancy rate in St. Louis has been
slightly higher than the national rate during the
past four years. According to MPF Research, the St.
Louis MSA apartment vacancy rate was 5.9 percent in the
second quarter of 2014, down from 6.8 percent a year
earlier, representing generally balanced market conditions.
The decrease in the vacancy rate occurred despite increased
construction because demand for rental housing was extremely
high during the prior year. The national apartment vacancy
rate was 4.4 percent during the second quarter of 2014, down
slightly from 4.7 percent a year earlier. During the second
quarter of 2014, the average apartment rent in the St. Louis
MSA increased 3.6 percent from a year earlier to $803,
compared with a nationwide increase of 3.4 percent to
$1,152. Overall rental market conditions in the St. Louis metro
area remain weaker than the apartment market due to a high
number of vacant single-family rental properties. According to
the CPS/HVS (Current Population Survey/Housing Vacancy
Survey) conducted by the Census Bureau, as of the third quarter
of 2014 the overall rental vacancy rate for the St. Louis MSA
was 12.9 percent compared to a national rate of 7.4 percent.
The 2013 ACS (American Community Survey) indicates that
single-family homes accounted for 37 percent of all rental
units in the St. Louis MSA, while representing 35 percent of all
rental units in the nation.

Trends in Mortgage Delinquencies and
Foreclosures:

The share of distressed mortgages in St. Louis did not reach
national levels. According to Black Knight Financial Services, Inc., as of
August 2014 the St. Louis MSA placed 208th out of 381 metropolitan areas
ranked by share of mortgages at risk of foreclosure (90 or more days delinquent
or in the foreclosure process). From 2000 through 2006, the share of mortgages
at risk of foreclosure in the St. Louis MSA was very similar to the national rate
according to CoreLogic data. In 2007 and 2008, when the foreclosure crisis
began and single-family foreclosures were largely driven by unaffordable nontraditional loan products, the increase in mortgages at risk of foreclosure in the St.
Louis MSA followed the national trend, but at a slower rate. From the beginning
of 2007 to the end of 2008, the share of distressed mortgages in St. Louis rose
from 1.8 to 3.3 percent, compared with a national increase from 1.6 percent to
4.5 percent. Beginning in 2009, foreclosures were increasingly driven by loss
of income, unemployment, and strategic defaults as the economy worsened,
according to research by the Federal Reserve Bank of Chicago. A sharp spike
upward in the rate of distressed mortgages occurred in 2009 for both the St. Louis
MSA and the nation. By early 2010, mortgages at risk of foreclosure peaked at
8.0 percent nationally and at 5.5 percent in St. Louis. The share of distressed
mortgages has since fallen to 3.9 percent nationally and to 2.9 percent in St. Louis.

Spotlight on the Housing Market in the St. Louis, MO-IL MSA | Page 3

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | October 2014
Over the last year, mortgages at risk of foreclosure in St. Louis
decreased by 20 percent--from 13,550 to 10,850--compared
with a national decline of 30 percent over the same period.
A partial explanation for the lower share of distressed
mortgages in St. Louis relative to the nation may be a shorter
foreclosure processing time in Missouri, although the timeline
in Illinois is longer than nationally. As of the second quarter
of 2014, the average time to complete a foreclosure was 285
days in Missouri, much lower than the national average of
577 days, although the average time was 850 days in Illinois.
Realty Trac data show foreclosure completions in
St. Louis have been close to the national average
since April 1, 2009, but are higher in the most
recent quarter. From April 2009 through August 2014,
the number of foreclosure completions as a percentage of all
housing units was 2.9 percent in St. Louis, slightly lower than
the 3-percent rate for the nation. Foreclosure completions have
been trending downward in the St. Louis MSA since 2012.
During the second quarter of 2014, the St. Louis metropolitan
area had a foreclosure completion rate of 0.1 percent, slightly
higher than the national average of 0.06 percent during the
same time period. The number of foreclosure completions in
St. Louis in the second quarter of 2014 is 25 percent below
the rate a year earlier, however.
The efforts of numerous state and local entities and financial
institutions in partnership with the federal government have
helped contain the rate of foreclosures. In 2010, Illinois
passed a law allowing homeowners to block a judicial sale
if they could prove they had applied for a loan modification
under the Federal Home Affordable Modification Program
(HAMP) and the property was sold in violation of the
program’s terms. In 2013, Governor Pat Quinn of Illinois
signed Senate bill 1045 which extended the law through the
end of 2015. The need for recovery efforts continues, as 8.5
percent of mortgages in the St. Louis MSA remain underwater
as of the second quarter of 2014 according to CoreLogic,
although this is down from 11.8 percent a year earlier. This
compares to a 10.7 percent share of underwater borrowers
at the national level. According to Zillow Inc., St. Louis ranked
fourth among metropolitan areas with the highest proportion
of homeowners that remain “effectively” under water on their
Foreclosure Completion Rates in the St. Louis MSA
Second Quarter 2014
Area
St. Louis MSA
Nation
Note:

Foreclosure
Completions

Foreclosure
Rate

Since April 1, 2009
Foreclosure
Completions

Foreclosure
Rate

1,200

0.10%

36,180

2.9%

85,300

0.06%

3,921,900

3.0%

Foreclosure Rates as Percent of All Housing Units;
Data through August 2014 for foreclosures since April 2009	
Source: Realty Trac and Census Bureau

mortgages. Effectively underwater mortgages are defined by Zillow to include
homeowners whose equity is negative or those who have less than 20 percent
positive equity in their homes.

The Administration’s Efforts To Stabilize the St.
Louis MSA Housing Market
The Administration’s mortgage and neighborhood assistance programs--the Home
Affordable Modification Program (HAMP, which is part of the broader Making
Home Affordable program), the Federal Housing Administration (FHA) mortgage
assistance programs, the Neighborhood Stabilization Program (NSP), and the
Hardest Hit Fund (HHF) program–combined with assistance from the HOPE Now
Alliance of mortgage servicers and the National Mortgage Servicing Settlement
have helped stabilize the St. Louis MSA housing market.

From the launch of the Administration’s assistance programs in April 2009 through
the end of August 2014, nearly 66,200 homeowners have received mortgage
assistance in the St. Louis metropolitan area. More than 44,700 interventions
were completed through the HAMP and FHA loss mitigation and early delinquency
intervention programs. An estimated additional 21,500 proprietary mortgage
modifications have been made through HOPE Now Alliance servicers. While
some homeowners may have received help from more than one program, the
number of times assistance has been provided in the St. Louis metropolitan area is
nearly twice the number of foreclosures completed during this period (36,200).
Under the landmark National Mortgage Servicing Settlement signed in February
2012, more than 6,259 Missouri homeowners have benefitted from over $250
million in refinancing, short sales and completed or trial loan modifications,
including principal reduction on first and second lien mortgages provided as of
June 30, 2013. Nationwide, the settlement has provided more than $50 billion
in consumer relief benefits to more than 631,000 families. That is in addition
to the $2.5 billion in payments to participating states and $1.5 billion in direct
payments to borrowers who were foreclosed upon between 2008 and 2011.
Given over three rounds, the Neighborhood Stabilization Program
has invested $7 billion nationwide to help localities work with non-profits and
community development corporations to turn tens of thousands of abandoned and
foreclosed homes that lower property values into homeownership opportunities
and the affordable rental housing that communities need.

Spotlight on the Housing Market in the St. Louis, MO-IL MSA | Page 4

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | October 2014
NSP1 funds were granted to all states and selected local
governments on a formula basis under Division B, Title III of
the Housing and Economic Recovery Act (HERA) of 2008;
NSP2 funds authorized under the American Recovery and
Reinvestment Act (the Recovery Act) of 2009 provided grants
to states, local governments, nonprofits and a consortium of
nonprofit entities on a competitive basis; and NSP3 funds
authorized under the Dodd–Frank Wall Street Reform and
Consumer Protection Act of 2010 provided neighborhood
stabilization grants to all states and select governments on a
formula basis.
In addition to stabilizing neighborhoods and providing
affordable housing, NSP funds have helped save jobs.
Each home purchased, rehabilitated and sold through the
NSP program is the result of the efforts of 35 to 50 local
employees.
Overall, a total of $23.8 million in NSP funds has been
awarded to jurisdictions in the St. Louis MSA either as a
direct grantee or as a sub-recipient: the City of St. Louis,
MO; St. Louis County, MO, and Madison County,
IL. Approximately 87 households in the MSA have already
benefited from NSP, and activities funded by the program are
expected to provide assistance to an additional 85 owneroccupied and renter households.
The City of St. Louis received a total of $14.5 million in
NSP funding. The City, through its Community Development
Administration (CDA), invested $12.8 million to acquire and
rehabilitate foreclosed residential properties in neighborhoods
with the highest rates of foreclosure and subprime mortgages.
Removing vacant properties and introducing new residents
helped to stabilize these neighborhoods. Special attention
was given to preserving the St. Louis’ historic housing stock,
which is considered to be a critical asset of the City, as well
as to introduce sustainable and energy efficient materials.
The CDA coordinated with both non-profit housing entities
and for-profit corporations to conduct the NSP residential
development projects.
•	 In the Hyde Park neighborhood, the City of St. Louis
invested $3 million in NSP funding and $1 million in
HOME funding to complete Hyde Park South, a
scattered-site development project. HOME is a HUD
program providing grants to states and localities to create
St. Louis MSA Housing Units to Date Benefitting
From NSP by Type of Activity
Construction or Rehabilitation
Demolition and Clearance
Homeownership Assistance to Low- and Moderate-Income
Total Housing Units
Additional Projected Housing Units

76
10
1
87
172

affordable housing. The project involved substantial rehabilitation of 27
historic buildings within a concentrated eight-block radius and created 50
affordable rental units in addition to reutilizing three vacant commercial
spaces. The City also relied on Federal and State Historic and Low Income
Housing Tax Credits to fund the project.
•	 In the Dutchtown and Mt. Pleasant neighborhoods located in the
southern part of St. Louis, over 17 percent of residential units were affected
by foreclosure between 2002 and 2008. Approximately $1.1 million in NSP
funds were allocated to this area to rehabilitate and sell seven single-family
homes.
•	 St Louis County, MO received $12.2 million in NSP funding. A portion
of the funds have been used to improve Lemay, a community in the southern
portion of the county adjacent to the City of St. Louis. Working with LeMay
Housing Partnership, ten blighted structures have been demolished, six vacant
properties have been rehabilitated, 15 residential units have been constructed
or are in the process of construction, and 40 lease-purchase homes have been
built. St. Louis County utilized Home Investment Partnership funds, Community
Development Block Grants, Low Income Housing Tax Credits, and community
resources to address the various needs of the community.
•	 With $2.6 million in NSP funds, Madison County Community Development
(MCCD) constructed or rehabilitated 29 residential units in Madison
County, IL. A 16-unit multifamily property that serves single-person
households with mental health challenges was renovated. In partnership with
the Madison County Affordable Housing Corporation (MCAHC), 5 new singlefamily rental homes to serve physically disabled and sensory impaired lowincome families were constructed in Madison, IL. Four of the eight remaining
units were rehabilitated and four were newly constructed homes.
The Administration allocated $445.6 million from its Hardest Hit Fund to the
state of Illinois. The Illinois Housing Development Authority (IHDA) oversees the
Illinois Hardest Hit Fund (HHF) program, which was launched in July 2011. The
Illinois HHF offers several assistance options to homeowners at high risk of default
or foreclosure. These programs include: the Homeowner Emergency Loan Program
(HELP), the Mortgage Resolution Fund (MRF), the Home Preservation Program
(HPP), and the Blight Reduction Program (BRP).

Spotlight on the Housing Market in the St. Louis, MO-IL MSA | Page 5

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | October 2014
The Homeowner Emergency Loan Program provides up to
18 months or $35,000 in monthly mortgage payment and/
or reinstatement assistance, paid to the lender on behalf
of unemployed and underemployed homeowners. The
Home Preservation Program provides principal reduction or
reinstatement assistance to help homeowners in obtaining a
refinance, recast, or permanent mortgage modification and
to achieve an affordable payment (less than or equal to 38
percent of monthly income).
Through a public-private partnership, the Mortgage Resolution
Fund facilitates modifications for delinquent and distressed
mortgages purchased from lenders. This loan-purchase and
modification program is offered on a select basis in six

Chicago metro-area counties. Illinois recently approved and plans to launch its
new Blight Reduction Program, which will be offered in partnership with local
governments and nonprofit partners in targeted neighborhoods throughout the
state. This program is designed to prevent avoidable foreclosures through the
demolition, greening, and ongoing maintenance of abandoned and blighted
residential properties.
As of June 30, 2014, the most recent quarter for which data are available,
approximately $262 million in HHF assistance has been disbursed on behalf of
13,371 Illinois homeowners. The Illinois HHF closed its portal to new applicants
on September 30, 2013. IHDA will continue to administer program funds and
review existing applicants until all program funds have been committed. For
alternative options, homeowners seeking assistance with their mortgage can visit
the Illinois Foreclosure Prevention Network website: www.keepyourhomeillinois.org.

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102