February 2022
The U.S. real estate market remains hot ahead of the spring selling season, with
existing home sales up 6.7% as of last measure, according to the National
Association of REALTORS®. Experts attribute the growth in sales to an uptick in
mortgage interest rates, as buyers rushed to lock down their home purchases before
rates move higher. Mortgage rates have increased almost a full percentage point
since December, with the average 30-year fixed-rate mortgage briefly exceeding 4%
in February, the highest level since May 2019.
New Listings in the Twin Cities region decreased 7.3 percent to 4,427. Pending Sales
were down 10.5 percent to 3,809. Inventory levels fell 19.0 percent to 4,361 units.
Prices continued to gain traction. The Median Sales Price increased 8.3 percent to
$340,000. Days on Market was down 8.7 percent to 42 days. Sellers were encouraged
as Months Supply of Homes for Sale was down 20.0 percent to 0.8 months.
Inventory was at an all-time low of 860,000 as February began, down 17% from a year
ago and equivalent to 1.6 months supply. According to Lawrence Yun, Chief
Economist at the National Association of REALTORS®, much of the current housing
supply is concentrated at the upper end of the market, where inventory is increasing,
while homes priced at the lower end of the market are quickly disappearing, leaving
many first-time buyers behind. The shortage of homes is boosting demand even
further, and with bidding wars common in many markets, it’s no surprise sales prices
continue to soar.
