Inventory & Listings:
- New listings in the Twin Cities metro area increased by 12.1% year-over-year in March, indicating a seasonal uptick as sellers enter the market.
- Despite this increase, overall inventory remains low, with approximately 7,600 homes on the market, significantly below historical averages.
Buyer Demand:
- Buyer activity is robust, particularly for homes priced between $250,000 and $500,000, leading to multiple offer situations and quick sales.
- Homes are selling rapidly, often within days of listing, especially in the mid-price range.
Pricing Trends:
- The median sales price in the Twin Cities metro rose by 3.5% year-over-year in March, reaching $380,000.
Mortgage Rates:
- Mortgage rates have stabilized around 6% to 6.5%, which, while higher than pandemic-era lows, are prompting some homeowners with previously low rates to delay selling.
Key Market Characteristics
- Seller’s Market: With approximately 2.0 months of housing supply, the market favors sellers, as a balanced market typically requires 4–6 months of supply.
- Increased Listings: The rise in new listings suggests that homeowners are gradually adjusting to current mortgage rates, contributing to a slight easing of inventory constraints.
- Affordability Challenges: First-time buyers face hurdles due to rising home prices and higher mortgage rates, leading to increased competition and the need for strategic offers.
Outlook for 2025
- Sales Volume: Existing home sales are projected to increase by 7% to 12% in 2025, driven by improved inventory and buyer adaptation to current mortgage rates.
- Price Appreciation: Home prices are expected to continue a modest upward trajectory, with forecasts indicating a 2% to 5% increase over the year.
- Market Balance: While inventory is improving, the market is anticipated to remain tight, maintaining a seller’s advantage in the near term.