August 2023
Higher mortgage rates, along with elevated sales prices and a lack of housing inventory, have continued to impact market activity during the summer home buying season. The average 30-year fixed-rate mortgage has remained above 6.5% since May, recently hitting a two-decade high in August, according to Freddie Mac. As a result, existing-home sales have continued to slow nationwide, dropping 2.2% month over-month as of last measure, with sales down 16.6% compared to the same time last year, according to the National Association of REALTORS® (NAR).
New Listings in the Twin Cities region decreased 2.8 percent to 6,077. Pending Saleswere down 10.5 percent to 4,468. Inventory levels fell 11.8 percent to 8,111 units.
Prices continued to gain traction. The Median Sales Price increased 2.7 percent to $380,000. Days on Market was up 18.5 percent to 32 days. Buyers felt empowered as Months Supply of Homes for Sale was up 15.8 percent to 2.2 months.
Falling home sales have done little to cool home prices, however, which have continued to sit at record high levels nationally thanks to a limited supply of homes for sale. According to NAR, there were 1.11 million homes for sale heading into August,14.6% fewer homes than the same period last year, for a 3.3 months’ supply at the current sales pace. The shortage of homes for sale has boosted competition for available properties and is driving sales prices higher, with NAR reporting a national median existing-home price of $406,700, a 1.9% increase from a year earlier.
– SAINT PAUL AREA ASSOCIATION OF REALTORS®
