The August median home price increased 2.3% statewide to $360,000 and 2.8% in the metro to $399,999. Based on current mortgage rates and estimated property tax and insurance costs, the typical monthly payment on the median-priced home is roughly $2,880 for the metro and $2,625 statewide (metro included). “Today’s buyers are highly sensitive to monthly payments and with lower rates, that should improve,” said Frank D’Angelo, President of Minneapolis Area REALTORS®. “Even though payments are down only slightly, buyers aren’t going over list price nearly as much and they’re moving more slowly and cautiously.”
Across the vast majority of the state, homes sold in an average of 48 days, while Twin Cities homes took 42 days to go under contract. Sellers accepted 97.9% of their list price statewide compared to 98.7% for the metro. Both market times and the ratio of sold to list price vary widely based on price range, location and market segment.
The latest trusted economic data continues to show a slowing labor market. The economy only created 22,000 jobs in August compared to expectations of 75,000. Roughly 150,000 new jobs each month would be needed to absorb new entrants into the labor force. A healthy housing market depends on gainfully employed residents earning a livable wage. The housing market remains “rate dependent,” rates are “Fed dependent,” and the Fed is “data dependent.” And since the data shows a slowing economy, the Fed is more likely to cut rates. Additionally, uncertainty typically generates more demand for safe treasuries and bonds which drives the price up and the yield down. The 10-year yield in particular impacts mortgage rates.