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Closed Sales Down in April as Home Prices Rise

By MNR News posted 05-11-2022 09:49

  

New listings shrink, interest rates creep up, and demand remains high

MINNEAPOLIS (May 10, 2022) — With closed sales down by almost 11% over last April, the sales season was off to a comparatively slower start. Historically, the numbers indicated a return to more normal patterns for this time of year. Declines in new listings, which were down nearly 7% compared to a year ago, contributed to softening sales. Statewide, there were 8,567 homes for sale, down 9.6% from April 2021. This equates to just over a one-month supply of properties on the market, a trend that has persisted since the end of 2020. Despite the limited inventory, buyer demand remains high, pushing the median home sales price in Minnesota up 11.5% to $340,000. On average, sellers received 102.8% percent of their asking price, a 0.7% increase over April 2021.

“As low inventories and high consumer demand have become the new normal, market pressures continue driving up the median price of a home,” said Chris Galler, CEO of Minnesota Realtors. “Interest rates continue to rise, too. A 30-year fixed mortgage is now 5.6% and still climbing. That’s why the affordability index, which measures whether the average family earns enough to obtain a mortgage on a typical home, dropped 29% over last year. This environment disproportionately impacts lower- and mid-income buyers—especially first-time homebuyers. Increasing the availability of affordable homes calls for a range of solutions, from down-payment assistance and more new construction to incentives for fence-sitting homeowners to sell their properties. There are no magic bullets, but over time these approaches will yield good results.”

April year-over-year summary of key market indicators:

  • Closed sales decreased 10.9% to 6,444
  • Median sales price increased 11.5% to $340,000
  • Average sales price increased 12.6% to $388,667
  • New listings decreased 6.7% to 9,814
  • Pending sales decreased 9.5% to 8,124
  • Days on the market decreased 16.7% to 30 days
  • Homes for sale decreased 9.6% to 8,567

Closed Home Sales Across Minnesota by Region

In April, closed sales declined in 12 out of 13 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 10.9% year over year. Only one region reported an increase: Southwest Central at 3.6%. The smallest declines were seen in Southeast at 7.3%, 7-County Twin Cities at 8.5%, and Southwest at 8.9%. The largest declines were reported in South Central at 19.8%, Headwaters at 22.9%, and West Central at 28.6%. See the chart below for more details comparing closed home sales for April 2022 to April 2021.

The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on
which MAR & SPAAR local associations report.
 

View full regional and county reports here.

View statewide report here.

About Minnesota Realtors®

Minnesota Realtors® (MNR) is the membership organization supporting all 22,000 Realtors® in the state of Minnesota. MNR is dedicated to helping Realtors® succeed in providing comprehensive and informed guidance to their customers seeking to buy or sell a home. MNR provides Realtors® with a code of ethics, continuing education, real estate transaction forms, legal services and dispute resolution, as well as lobbying and advocating for homeownership rights and the real estate industry. MNR works in partnership with the National Association of Realtors, as well as more than 15 affiliate regional associations within Minnesota. MNR is a non-profit organization founded in 1919, with headquarters in Minnetonka, Minnesota, and a branch office in St. Paul, Minnesota. Find us at  www.mnrealtor.com and follow us on Facebook, Instagram, Twitter and LinkedIn

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