January 2023
The US housing market began the year in a state of rebalance, with many buyers and sellers remaining cautious while they wait to see where the market is headed. Nationally, pending sales rose 2.5% month-to-month, marking the first increase since May, while sales of existing homes fell 1.5% as of last measure, according to the National Association of Realtors® (NAR). Demand for housing persists, but higher mortgage interest rates have cut into housing affordability, with total home sales down 17.8% last year compared to 2021.
New Listings in the Twin Cities region decreased 10.6 percent to 3,285. Pending Sales were down 19.3 percent to 2,560. Inventory levels rose 14.5 percent to 5,588 units.
Prices continued to gain traction. The Median Sales Price increased 2.7 percent to $341,995. Days on Market was up 46.3 percent to 60 days. Buyers felt empowered as Months Supply of Homes for Sale was up 44.4 percent to 1.3 months.
As sales slow, time on market is increasing, with the average home spending 26 days on market as of last measure, according to NAR. Seller concessions have made a comeback, giving buyers more time and negotiating power when shopping for a home. Although home prices remain high, mortgage rates declined steadily throughout January, falling to their lowest level since September, sparking a recent surge in mortgage demand. Lower rates should aid in affordability and may soon lead to an uptick in market activity ahead of the spring selling season.
– SAINT PAUL AREA ASSOCIATION OF REALTORS®
