651-770-5000
October 6, 2022
Mortgage rates decreased slightly this week due to ongoing economic uncertainty. However, rates remain quite high compared to just one year ago, meaning housing continues to be more expensive for potential homebuyers.
Information provided by Freddie Mac.
For Week Ending September 24, 2022
Lumber prices plunged to their lowest level in more than two years following the Federal Reserve’s 75-basis-point rate hike last week, as soaring mortgage interest rates and the slowdown in the US housing market have caused lumber demand to cool rapidly this year. The Wall Street Journal reports lumber futures are down about one-third from a year ago and have fallen more than 70% from this year’s peak in March.
IN THE TWIN CITIES REGION, FOR THE WEEK ENDING SEPTEMBER 24:
FOR THE MONTH OF AUGUST:
All comparisons are to 2021
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
September 29, 2022
The uncertainty and volatility in financial markets is heavily impacting mortgage rates. Our survey indicates that the range of weekly rate quotes for the 30-year fixed-rate mortgage has more than doubled over the last year. This means that for the typical mortgage amount, a borrower who locked-in at the higher end of the range would pay several hundred dollars more than a borrower who locked-in at the lower end of the range. The large dispersion in rates means it has become even more important for homebuyers to shop around with different lenders.
Information provided by Freddie Mac.
For Week Ending September 17, 2022
Mortgage rates topped 6% the week ending 9/15, as hotter-than-expected inflation helped push rates to their highest level since 2008 amid growing recession concerns. According to Freddie Mac, mortgage rates are now double what they were this time last year, squeezing homebuyer budgets and causing home sales to slow under the weight of rising borrowing costs.
IN THE TWIN CITIES REGION, FOR THE WEEK ENDING SEPTEMBER 17:
FOR THE MONTH OF AUGUST:
All comparisons are to 2021
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
(September 16, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both sales and listing activity were down in August while home price growth has slowed to its lowest level in two years but remains positive. Sellers also accepted lower offers as market times rose.
Inventory & Home Prices
The median home price in the Twin Cities reached $369,750 but the year-over-year growth rate is slowing. While prices are not falling, they’re not rising as quickly as they were. The 5.6 percent price growth in August is below the roughly 8.0 to 16.0 percent gains seen over the last two years. The deceleration in price growth likely reflects the pullback in demand caused by higher interest rates and economic uncertainty. Closed sales were down 20.3 percent in August compared to last year. Buyers also still face low inventory and limited options, although there’s evidence that’s changing.
“We’re seeing a less competitive landscape as the market has slowed given current interest rates,” said Denise Mazone, President of Minneapolis Area REALTORS®. “But the silver lining is that a less frenzied market could spell more inventory and opportunity for persistent buyers.”
August ended with 8,552 homes for sale, nearly flat compared to last year. Although the region is still a seller’s market, the momentum has been shifting back towards a more balanced marketplace. Month’s supply of inventory rose 13.3 percent to 1.7 months.
Sales & Listings
Buyer activity has softened compared to recent years. This is partly caused by higher mortgage rates, but it also reflects demand being pulled forward (i.e. sales that would’ve occurred in 2022/23 instead took place in 2020/21). August showed 4,981 signed purchase agreements, 23.8 percent short of 2021 levels and the lowest August figure since 2014. But seller activity reached its lowest level since August 2012. The easing of demand has impacted how quickly homes sell. Homes remained on market for an average of 26 days, 18.2 percent longer than last August.
“Sellers may notice that their homes are taking an extra few days to go under contract,” according to Mark Mason, President of the Saint Paul Area Association of REALTORS®. “But nobody talks about the fact that even this slower pace is still fast historically. A cooling of red-hot demand and a less intense landscape means a more sustainable and accessible marketplace.”
Sellers listed 6,186 properties on the market, 19.9 percent fewer than last August. Many Baby Boomers are choosing to age in place and aren’t listing their homes. Some homeowners are reluctant to trade into a higher mortgage rate on a higher priced home given economic uncertainty. And, some sellers are choosing to wait given their lack of options once their home sells. The industry has also underbuilt housing for about 15 years, and it will take time to rise out of that deficit.
Location & Property Type
Market activity varies by area, price point and property type. New home sales fell 11.0 percent while existing home sales were down 20.3 percent. Single family sales fell 19.7 percent, condo sales declined 26.7 percent and townhome sales were down 17.4 percent. Sales in Minneapolis decreased 23.3 percent while Saint Paul sales fell 18.9 percent. Cities like Monticello, Golden Valley, and Orono saw the largest sales gains while Stillwater, Chanhassen, and Fridley had lower demand than last year.
August 2022 Housing Takeaways (compared to a year ago)
