February Housing Market Report

Spring market blossoming early amid signs of turnaround

  • The median sales price increased 4.5% to $357,700
  • Signed purchase agreements rose 13.1%; new listings up 34.5%
  • Market times fell 3.3% to 59 days; inventory up 13.3% to 6,665

(Mar. 18, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both buyer and seller activity rose in February. Homes also sold in less time and at higher prices.

Sellers, Buyers and Housing Supply
With four consecutive year-over-year increases in new listings and three consecutive year-over-year increases in pending sales, the market turnaround narrative is gaining traction. While inventory levels were up, potential buyers should understand that the market remains significantly undersupplied. In February, sellers listed 34.5% more homes on the market and buyers signed 13.1% more purchase agreements. Sellers unwilling to give up their favorable mortgage rate have withheld listings due to the “rate lock-in effect” but now there is a backlog and we’re seeing some of that activity being released. Buyers had also delayed their purchases until rates came down or until they had some earnings growth, were more able to save for a downpayment and saw more inventory that met their needs. While supply and demand normalize, buyer and seller activity won’t immediately return to previous highs. That will take time—but just how much depends on both market and economic factors. Since these seemingly strong gains are skewed by a low baseline period, it’s not that activity has surged recently as much as activity declined last year at this time due to the Federal Reserve’s inflation fight and rate hikes.

Inventory levels are on the rise in the metro, up 13.3% compared to last February. Those out shopping for homes during this spring market should expect both more listings from pent-up sellers but also more competition from pent-up buyers. In that sense, activity levels will be higher but the balance between supply and demand will remain tight. But if rates do fall further, that could induce even more demand which would cause a resurgence in multiple offer situations and homes selling for over list price. “Perhaps it’s still early to make the call, but it sure feels like we’ve reached a turning point,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “Despite the market ramping up, buyers are still cautious and deliberate but also more optimistic.”

Prices, Market Times and Negotiations
Supply levels are too low for prices to fall but rates are too high for prices to rise much. The median sales price rose 4.5% to $357,700, which amounted to $203 per square foot. During the month, sellers accepted offers at 97.5% of list price after 59 days compared to 97.2% in 61 days last February. Sellers still enjoy pricing power and the upper hand in general but some are having to make concessions by way of price reductions, some seller paid closing costs and other tactics. “There is definitely some momentum heading into spring market,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “But turnarounds rarely happen overnight. Builders play a key role, lenders are being more innovative and consumers are persistent and more realistic.”

Location & Property Type
Market activity always varies by area, price point and property type. New home sales rose at over twice the rate of existing home sales. Single family sales rose at over twice the rate as townhomes. Sales over $500,000 rose at over three times the rate of sales under $500,000. Cities such as Shorewood, Forest Lake, Minnetrista and New Richmond saw among the largest sales gains while Crystal, Andover, Buffalo and Inver Grove Heights all had notably weaker demand. For cities with at least five sales, the highest priced areas were Medina, Orono, North Oaks and Lake Elmo while the most affordable areas were Red Wing, Zumbrota and Vadnais Heights.

February 2024 Housing Takeaways (compared to a year ago)

  • Sellers listed 4,667 properties on the market, a 34.5% increase from last February
  • Buyers signed 3,308 purchase agreements, up 13.1% (2,614 closed sales, up 11.2%)
  • Inventory levels rose 13.3% to 6,665 units
  • Month’s Supply of Inventory rose 28.6% to 1.8 months (4-6 months is balanced)
  • The Median Sales Price was up 4.5% to $357,700
  • Days on Market was down 3.3% to 59 days, on average (median of 38 days, down 13.6%)
  • Changes in Pending Sales activity varied by market segment
    • Single family sales rose 16.8%; condo sales were up 5.4%; townhouse sales increased 7.0%
    • Traditional sales were up 12.8%; foreclosure sales rose 45.5% to 48; short sales were up 37.5% to 11
    • Previously owned sales increased 11.0%; new construction sales rose 26.6%
    • Sales under $500,000 were up 8.9%; sales over $500,000 increased 30.3%

    From The Skinny Blog.

Weekly Market Report

For Week Ending March 9, 2024

Mortgage rates fell for the first time in five weeks, as the average 30-year fixed rate mortgage slid 0.06 percentage points to 6.88% the week ending March 7, 2024, according to Freddie Mac. The decline in rates helped mortgage applications increase 7.1% on a seasonally adjusted basis from the previous week, according to the Mortgage Bankers Association, while applications to purchase a home were up 5% from the previous week.

IN THE TWIN CITIES REGION, FOR THE WEEK ENDING MARCH 9:

  • New Listings increased 24.9% to 1,313
  • Pending Sales increased 11.6% to 898
  • Inventory increased 11.9% to 6,793

FOR THE MONTH OF FEBRUARY:

  • Median Sales Price increased 4.6% to $358,000
  • Days on Market decreased 3.3% to 59
  • Percent of Original List Price Received increased 0.3% to 97.5%
  • Months Supply of Homes For Sale increased 28.6% to 1.8

All comparisons are to 2023

Click here for the full Weekly Market Activity Report. From MAAR Market Data News.

Weekly Market Report

For Week Ending March 2, 2024

The limited supply of existing-home inventory nationwide continues to benefit the new-home market, with applications for new home purchases up 38% month-over-month and 19.1% year-over-year in January, according to the Mortgage Bankers Association Builder Application Survey. The latest reading marks the 12th consecutive annual increase and is the strongest non-seasonally adjusted reading for the month in the survey’s history.

IN THE TWIN CITIES REGION, FOR THE WEEK ENDING MARCH 2:

  • New Listings increased 2.5% to 1,198
  • Pending Sales increased 10.0% to 845
  • Inventory increased 11.7% to 6,686

FOR THE MONTH OF JANUARY:

  • Median Sales Price increased 3.2% to $353,035
  • Days on Market decreased 8.2% to 56
  • Percent of Original List Price Received increased 0.6% to 96.6%
  • Months Supply of Homes For Sale increased 28.6% to 1.8

All comparisons are to 2023

Click here for the full Weekly Market Activity Report. From MAAR Market Data News.

Weekly Market Report

For Week Ending February 24, 2024

U.S. housing starts fell 14.8% month-over-month in January to a seasonally adjusted annual rate of 1,331,000 units, according to data from the U.S. Census Bureau. Single-family starts dropped 4.7% from the previous month, while multi-family starts declined 35.8%. Although construction was down for the month, builder sentiment continues to improve, rising to the highest level since August 2023, according to the National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI).

IN THE TWIN CITIES REGION, FOR THE WEEK ENDING FEBRUARY 24:

  • New Listings increased 48.6% to 1,138
  • Pending Sales increased 7.0% to 799
  • Inventory increased 5.7% to 6,537

FOR THE MONTH OF JANUARY:

  • Median Sales Price increased 3.1% to $352,500
  • Days on Market decreased 8.2% to 56
  • Percent of Original List Price Received increased 0.7% to 96.7%
  • Months Supply of Homes For Sale increased 28.6% to 1.8

All comparisons are to 2023

Click here for the full Weekly Market Activity Report. From MAAR Market Data News.

Weekly Market Report

For Week Ending February 17, 2024

Housing inventory improved for the third month in a row, with the number of homes actively for sale in January increasing 7.9% year-over-year, according to Realtor.com’s January 2024 Monthly Housing Market Trends Report. Lower mortgage rates appear to have brought some sellers back to the market, as the number of newly listed homes rose 2.8% year-over-year. While this is good news for prospective homebuyers, the supply of homes for sale remains down compared to typical 2017 – 2019 levels.

IN THE TWIN CITIES REGION, FOR THE WEEK ENDING FEBRUARY 17:

  • New Listings increased 14.7% to 1,090
  • Pending Sales increased 11.2% to 792
  • Inventory increased 4.9% to 6,451

FOR THE MONTH OF JANUARY:

  • Median Sales Price increased 3.1% to $352,500
  • Days on Market decreased 8.2% to 56
  • Percent of Original List Price Received increased 0.7% to 96.7%
  • Months Supply of Homes For Sale increased 28.6% to 1.8

All comparisons are to 2023

Click here for the full Weekly Market Activity Report. From MAAR Market Data News.

Weekly Market Report

For Week Ending February 10, 2024

Seller profits declined for the first time since 2011, according to ATTOM’s Year-End 2023 U.S. Home Sales Report, which found that home sellers made a $121,000 profit on the sale of a median-priced single-family home in 2023, resulting in a 56.5% return on investment year-over-year. This is a slight drop from 2022, when home sellers made $122,600 on the sale of a typical single-family home, for a 59.8% return on investment. Despite the decline, however, seller profits and profit margins remained near record levels last year.

IN THE TWIN CITIES REGION, FOR THE WEEK ENDING FEBRUARY 10:

  • New Listings increased 18.4% to 1,061
  • Pending Sales increased 6.1% to 760
  • Inventory increased 3.5% to 6,355

FOR THE MONTH OF JANUARY:

  • Median Sales Price increased 3.2% to $353,035
  • Days on Market decreased 8.2% to 56
  • Percent of Original List Price Received increased 0.7% to 96.7%
  • Months Supply of Homes For Sale increased 21.4% to 1.7

All comparisons are to 2023

Click here for the full Weekly Market Activity Report. From MAAR Market Data News.

January Housing Market Report

Year off to promising start with gains in listings and sales

  • The median sales price increased 2.3% to $350,000
  • Signed purchase agreements rose 8.0%; new listings up 18.0%
  • Market times fell 8.2% to 56 days; inventory up 1.7% to 6,288

(Feb. 15, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both buyer and seller activity rose in January. Sales rose from low levels as mortgage rates softened making sellers more confident about listing their homes.

Sellers, Buyers and Housing Supply
Sellers listed 18.0% more homes than last January. That marked a third consecutive month of year-over-year gains in new listings. Sellers are more optimistic about listing their homes and about getting stronger offers. They’re also feeling better about their payments on the next house. On the demand side, pending sales rose 8.0%, suggesting demand could be stabilizing. That second consecutive gain in signed contracts again was helped by lower rates but also reflects a low baseline period. Three consecutive monthly increases in listings and two consecutive monthly sales gains aren’t enough to lift activity levels back to where they were before mortgage rates rose.

The number of active listings statewide stood at 6,288, or 1.7% more than last January. Aspiring buyers planning on shopping during spring market should expect more competition from pent-up demand and will also face stubbornly low inventory levels. Monthly mortgage payments are of top concern when it comes to household budgets. The increase in mortgage rates combined with higher prices has pushed the monthly payment on the typical home up to $2,700 compared to around $1,800 in 2021. Sellers accepted offers at about 96.7% of list price compared to 96.0% flat last January. “While too early to say for sure, we might look back at December and January as a turning point,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “The easing of rates combined with an increase in listings and inventory should mean somewhat smoother sailing for buyers.”

Prices, Market Times and Negotiations
Supply levels are too low for prices to fall but rates are too high for prices to rise much. The median sales price was up 2.3% to $350,000, which amounted to $199 per square foot. Homes lingered on the market for an average of 56 days, which is actually 8.2% faster than last year. In that time, sellers accepted offers at 96.7% of their asking price, which was up from 2023 but down from 2022. “The market activity is rising from the lows of 2023 and the mood is definitely different,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “As we head further into the spring market, the numbers show it’s still a seller’s market in most areas of the Twin Cities and buyers can position themselves for success by being ready to make a strong offer.”

Affordability, Rates and Payments
The Federal Reserve paused the rate hikes, but the impact of higher mortgage rates on monthly payments is hard to ignore. Mortgage rates hit a 23-year high in October 2023 but have retreated since. Recent data suggests the Federal Reserve may not be as willing to start cutting rates in March. The Housing Affordability Index reached its lowest level for January since at least 2004. Affordability is now at roughly 2006 levels. Using some assumptions around taxes and insurance, the monthly payment on the median priced home stood at $2,680 in 2023 compared to $1,760 in 2021. That additional cost can impact savings rates and discretionary spending in the economy.

Location & Property Type
Market activity always varies by area, price point and property type. New home sales rose at ten times the rate of existing home sales. Townhome sales rose at twice the rate as single family homes. Cities such as Medina, Monticello, New Prague and Rogers saw among the largest sales gains while Oak Grove, New Hope, Maplewood and Belle Plaine all had notably weaker demand.

January 2024 Housing Takeaways (compared to a year ago)

  • Sellers listed 3,942 properties on the market, an 18.0% increase from last January
  • Buyers signed 2,780 purchase agreements, up 8.0% (2,186 closed sales, up 3.2%)
  • Inventory levels rose 1.7% to 6,288 units
  • Month’s Supply of Inventory rose 21.4% to 1.7 months (4-6 months is balanced)
  • The Median Sales Price was up 2.3 percent to $350,000
  • Days on Market was down 8.2% to 56 days, on average (median of 39 days, down 9.3%)
  • Changes in Pending Sales activity varied by market segment
    • Single family sales rose 7.5%; condo sales were down 8.9%; townhouse sales were up 14.9%
    • Traditional sales increased 7.6%; foreclosure sales rose 22.6% to 38; short sales were up 250.0% to 14
    • Previously owned sales were up 3.3%; new construction sales increased 33.8%
    • Sales under $500,000 rose 6.3%; sales over $500,000 were up 14.6%


From The Skinny Blog.

Weekly Market Report

For Week Ending February 3, 2024

U.S. single-family rent growth was up 2.7% year-over-year as of last measure, according to Corelogic’s January 2024 U.S. Single-Family Rent Index, keeping in line with the annual rate of growth recorded prior to the pandemic. Attached singlefamily rents increased 3.3% year-over-year, while detached single-family rents rose 2.3%. Nationally, rent growth was highest in the lower-priced rental tiers, climbing 2.9% year-over-year.

IN THE TWIN CITIES REGION, FOR THE WEEK ENDING FEBRUARY 3:

  • New Listings increased 17.9% to 942
  • Pending Sales increased 4.2% to 720
  • Inventory increased 2.6% to 6,446

FOR THE MONTH OF DECEMBER:

  • Median Sales Price increased increased 1.4% to $353,900
  • Days on Market increased 2.0% to 51
  • Percent of Original List Price Received increased 0.4% to 96.7%
  • Months Supply of Homes For Sale increased 20.0% to 1.8

All comparisons are to 2023

Click here for the full Weekly Market Activity Report. From MAAR Market Data News.

Weekly Market Report

For Week Ending January 27, 2024

Builder confidence continues to rise amid declining mortgage rates, climbing seven points to 44 in January, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The latest reading marks the highest level of confidence since last summer, with builder sentiment up nine points from the same period last year. Mortgage rates have plunged more than one full percentage point since their peak of 7.79% in October, improving affordability and helping to bring some buyers back from the sidelines.

IN THE TWIN CITIES REGION, FOR THE WEEK ENDING JANUARY 27:

  • New Listings increased 13.7% to 847
  • Pending Sales increased 6.3% to 724
  • Inventory increased 0.5% to 6,486

FOR THE MONTH OF DECEMBER:

  • Median Sales Price increased 1.3% to $353,500
  • Days on Market remained flat at 50
  • Percent of Original List Price Received increased 0.4% to 96.7%
  • Months Supply of Homes For Sale increased 20.0% to 1.8

All comparisons are to 2023

Click here for the full Weekly Market Activity Report. From MAAR Market Data News.