February 2024 Housing Market Report

By MNR News posted 03-18-2024 09:56 AM

Buyers finding more choices amid ongoing signs of recovery
  • New listings up 34.8%; pending sales rose 12.6%
  • The median sales price increased 4.4% to $329,000
  • Closed sales up 11.5% to 3,586
(Mar. 18, 2024) – According to new data from Minnesota Realtors®, home buyers and sellers were more active across the state with gains in both sales and listings. Home prices rose while homes sold more quickly than last February.

Market Activity

With a fifth consecutive year-over-year increase in new listings and a fourth consecutive year-over-year increase in pending sales, the market turnaround narrative is gaining traction. Since the gains in listings have outpaced the gains in sales, inventory levels are also on the rise—most recently up 17.5% compared to February 2023. During the month, sellers listed 34.8% more homes, and buyers signed 12.6% more purchase agreements. This activity bump partly reflects what some call “pent-up activity.Sellers previously hesitant to list were ready to sell in February. As a result, a backlog of inventory is being released. It’s a similar story for buyers. Many home shoppers delayed purchasing until mortgage rates cooled or listings increased, using that waiting period to save for a larger down payment or household income growth. While supply and demand levels continue to stabilize and normalize, it will still take some time for activity levels to return to previous highs. These gains are coming off of low baseline periods seen in 2023. It’s not that activity has recently surged as much as activity declined last year due to the Federal Reserve’s inflation fight and ensuing rate hikes. Rates have cooled from around 7.8% last year to 6.6%. 


In addition to a better rate environment, those out home shopping were met with more choices and inventory than last year. There were 10,555 active listings statewide in February, 17.5% more than in February 2023. Even though listings are on the rise, demand continues to outweigh supply, as last month’s median home price stood at $329,000—an increase of 4.4% from last year. If rates fall further, as many experts predict, we could see buyer demand surge. If this happens, home prices are likely to follow suit. Homes also sold slightly faster than in February of 2023, averaging 52 days on the market. And sellers accepted offers at 96.7% of their list price compared to 96.5% last year. There’s been a lot of activity in the early spring market this year,” said Patti Jo Fitzpatrick, President-Elect of Minnesota Realtors®. “Buyers are benefiting from lower mortgage rates and more inventory, yet theres still a real need for more supply. Affordability concerns havent gone away even as were seeing some good progress.” The “affordability index” dropped below 100 to a measure of 96, meaning a family earning the median income cannot afford a median-priced home in Minnesota. 

Regional Dynamics
Market activity always varies across areas, price points, and property types. The Detroit Lakes, Duluth, Alexandria, and Brainerd regions saw the largest gains in listing activity, while pending sales rose the most in the Detroit Lakes, Alexandria, and Grand Rapids regions. Home prices rose the most in the Bemidji, Hibbing/Virginia, and Detroit Lakes regions. The most balanced markets were Bemidji and Detroit Lakes while the most undersupplied markets were Rochester, St. Cloud, and the Twin Cities.  

Twin Cities Metro Overview
Price growth was even between the metro and the state overall. There was also no significant difference in the increase in sales and listings. Metro home sellers got 97.5% of their list price after 59 days compared to 96.7% in 52 days statewide. With 1.8 and 1.9 months of supply in the metro and state, respectively, the housing supply shortageand related affordability challengesare affecting every region of the state. Inventory levels rose both for the metro and statewide. Minnesotans are rightly concerned about rising monthly payments and keeping up with maintenance costs, rising insurance rates, and taxes. These challenges are putting the dream of homeownership out of reach for far too many.

Insights and Anecdotes
Reports from agents across the state mimic what the data tells us: that activity has picked up notably for both buyers and sellers. The luxury market remains strong and cash sales remain elevated as rates hover just under 7.0%. Overall, and perhaps surprisingly, it’s still a seller’s marketjust not in every area, neighborhood, or price point.

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

State and metro key market indicators year over year for February 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 February 2024 Housing Report, click here.