612-382-4099
August 18, 2022
Inflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates that the housing market was experiencing earlier this year. The market continues to absorb the cumulative impact of the large price and rate increases that led to a plunge in affordability. As a result, over the rest of the year purchase demand likely will continue to drag, supply will modestly increase, and home price growth will decelerate.
Information provided by Freddie Mac.
(August 15, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, buyers in the Twin Cities have struggled to keep pace with the highs of 2021. Pending sales were down 23.3 percent in July compared to last year as buyers signed 4,807 purchase agreements. Buyers have been hampered by increased mortgage rates, still-low inventory, strong home prices and some economic uncertainty.
Sales & Listings
Buyer activity has been softening for 11 of the last 12 months as most acknowledge the frenzied demand of 2020 and 2021couldn’t last. July’s pending sales volume was 12.8 percent lower than July of 2019, reflecting affordability and supply challenges but also hinting at how demand was expedited from 2022/3 into 2020/1. “Many Twin Citizens eager to take advantage of historically low rates and purchase a home leapt at the chance,” said Denise Mazone, President of Minneapolis Area REALTORS®. “Combined with rising rates, that’s left a hole in our buyer pool this year, but there is still plenty of pent-up demand for homes. Plus there’s evidence rates are easing somewhat.” There has not been an influx of supply onto the market. Home sellers listed 6,845 homes last month, down 17.0 percent from last July. Selling activity has been fairly stable overall since 2020, but continuously lagging behind the supply needed to fuel the market demand, until the recent slowdown in sales.
Inventory & Home Prices
Homes in the metro sold for a median of $375,000 last month, 7.1 percent more than last July. That was the slowest growth rate in two years and amounts to $205 per square foot. The recent downshift in buyer activity has offered a small reprieve for persistent buyers thirsty for inventory and less competition. The metro ended July with 8,694 homes for sale, 4.5 percent more than last July. In a welcome development for buyers, inventory levels have grown for three consecutive months and months supply rose to 1.7. That suggests the supply squeeze is loosening but it’s important to recognize we’re still in a strong seller’s market. “Aspiring home buyers still face competition and multiple offers, just slightly less so than the last couple years, “according to Mark Mason, President of the Saint Paul Area Association of REALTORS®. “So while the market has rebalanced slightly, it still favors sellers.”
Location & Property Type
Market activity varies by area, price point and property type. New home sales fell 18.8 percent while existing home sales were down 16.4 percent. Single family sales fell 18.1 percent, condo sales declined 24.5 percent and townhome sales were down 20.8 percent. Sales in Minneapolis decreased 17.5 percent while Saint Paul sales fell 25.0 percent. Cities like Monticello, Golden Valley, and Orono saw the largest sales gains while Stillwater, Chanhassen, and Fridley had lower demand than last year.
July 2022 Housing Takeaways (compared to a year ago)
For Week Ending August 6, 2022
The average 30-year fixed rate mortgage dropped to 4.99% the week ending 8/4, marking the first time since April rates have dipped below 5%, according to Freddie Mac. With rates down the past two weeks, the Mortgage Bankers Association reports mortgage applications rose slightly from the previous week, including an uptick in refinance applications, as buyers took advantage of the opportunity to lock in lower rates and save on their monthly mortgage payment.
IN THE TWIN CITIES REGION, FOR THE WEEK ENDING AUGUST 6:
FOR THE MONTH OF JULY:
All comparisons are to 2021
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
August 11, 2022
The 30-year fixed-rate went back up to well over five percent this week, a reminder that recent volatility remains persistent. Although rates continue to fluctuate, recent data suggest that the housing market is stabilizing as it transitions from the surge of activity during the pandemic to a more balanced market. Declines in purchase demand continue to diminish while supply remains fairly tight across most markets. The consequence is that house prices likely will continue to rise, but at a slower pace for the rest of the summer.
Information provided by Freddie Mac.
For Week Ending July 30, 2022
As housing supply continues to increase across the country, prospective buyers’ housing expectations are on the rise as well, with the National Association of Home Builders (NAHB) reporting the share of prospective buyers expecting their home search to be easier in the coming months climbed to 22% in the second quarter, up from 17% in the first quarter. The NAHB attributes the improved outlook among buyers to increases in inventory and a decline in buyer competition.
IN THE TWIN CITIES REGION, FOR THE WEEK ENDING JULY 30:
FOR THE MONTH OF JUNE:
All comparisons are to 2021
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
August 4, 2022
Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.
Information provided by Freddie Mac.
