Typically, the late summer and early fall begin the quieter selling seasons in Minnesota, and data confirmed this cooling. Sales and median prices fell month over month in Q3. However, Realtors® reported multiple offers on some properties, and determined buyers were active across the state, though the pace was slower than earlier this spring. Buyers are still in the grips of a seller’s market, facing the aforementioned low supply and affordability obstacles. However, it’s no cakewalk for sellers, who face limited options and similar affordability issues, should they choose to list their current home or buy another.
NAR’s Lawrence Yun is confident we’re not in a housing bubble that’s going to burst. “There is not going to be a home price crash...When you have a housing shortage, home prices simply cannot decline in any measurable way,” he said in a recent interview with CNN. NAR consumer research suggests that a 5.5% 30-year FRM may be the “magic number” that will spark the housing market next year.
NAR’s Affordability Index Explained: https://www.investopedia.com/terms/a/affordability-index.asp
This index measures housing affordability for the region. For example, an index of 120 means the median household income is 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability.