April 2022
The average 30-year fixed rate mortgage exceeded 5% in April, the highest level since
2011, according to Freddie Mac. The recent surge in mortgage rates has reduced the
pool of eligible buyers and has caused mortgage applications to decline, with a
significant impact on refinance applications, which are down more than 70%
compared to this time last year. As the rising costs of homeownership force many
Americans to adjust their budgets, an increasing number of buyers are hoping to help
offset the costs by moving from bigger, more expensive cities to smaller areas that
offer a more affordable cost of living.
New Listings in the Twin Cities region decreased 7.0 percent to 7,046. Pending Sales
were down 9.2 percent to 5,693. Inventory levels fell 9.2 percent to 5,758 units.
Prices continued to gain traction. The Median Sales Price increased 10.0 percent to
$370,000. Days on Market was down 9.7 percent to 28 days. Absorption rates were
even with last year as Months Supply of Homes for Sale remained flat at 1.1 months.
Affordability challenges are limiting buying activity, and early signs suggest
competition for homes may be cooling somewhat. Nationally, existing home sales are
down 2.7% as of last measure, while pending sales dropped 1.2%, marking 5 straight
months of under contract declines, according to the National Association of
REALTORS®. Inventory remains low, with only 2 months supply at present, and home
prices continue to rise, with the median existing home at $373,500, a 15% increase
from this time last year. Homes are still selling quickly, however, and multiple offers
are common in many markets.
– SAINT PAUL AREA ASSOCIATION OF REALTORS®
