January 2024 Housing Market Report

By MNR News posted 02-15-2024 10:08 AM


Year off to promising start with gains in listings and sales

  • New listings up 17.9%; pending sales rose 7.7%
  • Closed sales up 7.9%, marking first YOY increase since June 2021
  • The median sales price increased 3.0% to $315,000
  • The average market time was flat at 52 days
(Feb. 15, 2024) – According to new data from Minnesota Realtors®, home buyers and sellers started the year strong, posting gains in both sales and listings. Home prices rose while homes sold in the same amount of time as last January.

Market Activity 
During the month, sellers listed 17.9% more homes than last January. That’s the fourth consecutive month of year-over-year gains in new listings and could suggest sellers are feeling more confident about putting their homes on the market. Statewide, new listing gains may indicate one or both things: sellers are more optimistic about getting a stronger offer and/or feeling better about their payments on the next home, given rates are near an eight-month low. Meanwhile, pending sales were up 7.7%, suggesting demand continues to be strong as we approach the spring. That’s the third consecutive month we’ve seen an increase in signed purchase agreements. That, again, was helped by lower rates, and a low baseline comparison, as January 2023 was a slow month in a down year in the real estate market. Even four consecutive monthly increases in listings and three consecutive monthly sales gains aren’t enough to lift activity levels back to where they were before the Federal Reserve’s rate hikes. 

Buyers who were out searching found slightly more choices than last year. The number of active listings statewide stood at 10,068, 7% more than last January. Those patiently waiting until spring should know they’ll likely face more competition from pent-up demand and still stubbornly low inventory levels. Keeping monthly mortgage payments within budget is top of mind for today’s buyers—especially first-time buyers. The increase in mortgage rates combined with higher prices has pushed the monthly payment on the typical home to about $2,350 statewide (including the metro). That typical median home price is $315,000, an increase of 3% from last year. At an average of 52 days, homes spent the same amount of time on the market before sellers accepted an offer. And sellers accepted offers at about 95.9% of list price compared to 95.5% last January. It’s fairly clear that things are shifting, and we’re encouraged to see market activity picking up, though not at the intense pace of a few years ago” said Geri Theis, President of Minnesota Realtors®. “Gains in buyer and seller activity are important, but affordability and a lack of housing supply will continue to pose challenges in the market, especially for first-time buyers.”  

Regional Dynamics  

Market activity always varies across areas, price points, and property types. The Detroit Lakes, Alexandria, and Grand Rapids regions saw the largest gains in listing activity while pending sales rose the most in the St. Cloud, Willmar, and Bemidji regions. Homes took the longest to sell in the Hibbing/Virginia, Mankato, and Bemidji regions. The most balanced markets were Detroit Lakes and Bemidji, while the most undersupplied markets were St. Cloud, the Twin Cities, and Rochester.  

Twin Cities Metro Overview 

Metro home prices rose but less than they did statewide. The metro area also posted a larger gain in pending sales but a smaller gain in closed sales compared to the whole state. Sellers accepted around 96.7% of their list price after 56 days in the metro compared to 95.9% after 52 days statewide. With 1.7 and 1.8 months of supply in the metro and state. respectively, the housing shortage is affecting every corner of the state. Inventory levels were fairly flat in the metro but up 7% across the state. Affordability challenges continue to weigh on Minnesotans, and rising insurance costs have only compounded that. 

Insights and Anecdotes 

Sentiment across the state syncs up with the data. Agents report that activity is picking up, and some even report multiple offer situations with some listings selling for over list price. Luxury market activity remains robust. Cash sales remain elevated as buyers look to avoid higher rates. At just 1.8 months of supply, it’s still a seller’s market. Typically, 4-6 months of supply represents a balanced, neutral market. 

Regional year-over-year closed sales for January 2024:

State and metro key market indicators year over year for January 2024:

 All information is according to Minnesota Realtors® based on data from NorthstarMLS and other MN MLSs. Data is deemed reliable, but not guaranteed.  

To read our full January 2024 Housing Report, click here.