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

U.S Department of Housing and Urban Development

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

Spotlight on the Housing Market 

in the St. Louis, MO-IL MSA

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 - 0.4%

St. Louis MSA Households 1,012,419 1,119,020 

 Annual Growth Rate - 1.1%

St. Louis MSA Housing Units 1,092,915 1,236,222 

 Annual Growth Rate - 1.3%

Source: Census Bureau (2000 and 2010 Decennial)

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

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U.S Department of Housing and Urban Development

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

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U.S Department of Housing and Urban Development

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

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

U.S Department of Housing and Urban Development

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 

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. 

Foreclosure Completion Rates in the St. Louis MSA

Area

Second Quarter 2014 Since April 1, 2009

Foreclosure 

Completions

Foreclosure 

Rate

Foreclosure

Completions

Foreclosure 

Rate

St. Louis MSA 1,200 0.10% 36,180 2.9%

Nation 85,300 0.06% 3,921,900 3.0%

Note: Foreclosure Rates as Percent of All Housing Units; 

 Data through August 2014 for foreclosures since April 2009

Source: Realty Trac and Census Bureau
The Obama Administration’s Efforts To Stabilize the Housing Market and Help American Homeowners | October 2014 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

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

U.S Department of Housing and Urban Development

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 

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).

St. Louis MSA Housing Units to Date Benefitting 

From NSP by Type of Activity 

 Construction or Rehabilitation 76

 Demolition and Clearance 10

 Homeownership Assistance to Low- and Moderate-Income 1

Total Housing Units 87

Additional Projected Housing Units 172
The Obama Administration’s Efforts To Stabilize the Housing Market and Help American Homeowners | October 2014 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

Spotlight on the Housing Market in the St. Louis, MO-IL MSA | Page 6

U.S Department of Housing and Urban Development

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.