Closed Sales Down as Interest Rates Fall

By MNR News posted 02-10-2023 09:22 AM

Mortgages look more attractive, but buyers remain wary
MINNEAPOLIS (February 10, 2023)The housing market continued to normalize as closed sales for January declined 33% compared to the cooling, though still robust market of a year ago. New listings were also down 12.4% across the state, with just under 4,300 properties becoming available. Although mortgage interest rates fell to 6.09% by the end of January—the lowest since September 2022—home buyers struggled with affordability. The median sales price was up 3.4% over last year, increasing to $305,000. This slowed demand as the average number of days a home remained on the market swelled almost 21% to 52 days. Consequently, home sellers were accepting slightly smaller offers, receiving over 95% of their asking price compared to almost 99% in January 2022. With slower moving sales, the overall number of homes for sale increased almost 15% to 8,565. 

If mortgage rates continue declining, job creation continues, and inflation eases, buyers and sellers will likely feel more confident entering the real estate market coming into spring,” said Susan Dioury, interim CEO of Minnesota Realtors, and senior vice president of Risk Management. “For the first time in a long while, buyers are enjoying a better negotiating position, and benefitting from some seller concessions. Longer term, supply and affordability remain significant concerns, especially if the market demand heats up again. Overall, Minnesota’s housing market has stabilized and is resuming a healthy course after two years of remarkable activity.” 

January year-over-year summary of key market indicators

  • Closed sales decreased 33.0% to 2,975
  • Median sales price increased 3.4% to $305,000
  • Average sales price increased 7.4% to $364,269
  • New listings decreased 12.4% to 4,284
  • Pending sales decreased 20.1% to 3,609
  • Days on the market increased 20.9% to 52 days
  • Homes for sale increased 14.7% to 8,565 

 Closed Home Sales Across Minnesota by Region
In January, closed sales declined in all 13 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 33% year over year. The smallest declines were seen in Headwaters at 13.7%, North Central at 20.4%, and East Central at 21.4%. The largest declines were reported in South Central at 51.9%, Northwest at 56.3%, and Upper MN Valley at 60%. See the chart below for more details comparing closed home sales for January 2023 to January 2022.

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.comand follow us on Facebook, Instagram, Twitter and LinkedIn.