Affordability Index Climbs While Housing Inventory Declines
February 13, 2020
Although Minnesota’s housing affordability index increased +4.1% compared to a year ago, statewide inventory levels continued to decline. Minnesota now has less than a two-month supply. That’s down -17.4% from January 2019. By comparison, a balanced real estate market typically has a four to five-month supply of homes. Bottom line: More Minnesotans can afford a home, but there are fewer median-priced homes to purchase.
“We’ve been fortunate this winter to have both income increases and interest rate reductions,” said Chris Galler, CEO of Minnesota Realtors. “However, the inventory issue makes it difficult for many potential homebuyers to take advantage of these optimal conditions.”
Closed transactions increased +4.8% over last January while pending sales inched up +1.6%. Significantly, new listings were down -3%, underscoring the tight inventory environment. Bucking the trend was the Southwest Central Region, where there was a 9.2% spike in listings over the previous year.
Continuing its upward trend, the median sales price increased +5.3% to $245.400, which is slightly under the +6.1% increase from a year ago. In comparison, the seven-county Twin Cities Region, the median sales price was up +5.4% to $277,000.
Minnesota’s full January 2020 housing data report, including regional and county data, can be accessed here.
About Minnesota Realtors®
Serving more than 21,000 real-estate professionals, Minnesota Realtors® (MNR) unites and empowers Realtors® throughout the state so they can thrive. Dedicated to helping Realtors® build their careers and grow their businesses, MNR provides a wide range of services and resources that include legal services, community education, government affairs, and code of ethics and standards of practice support. Founded in 1919, MNR is a non-profit organization. For more information, visit my.mnrealtor.com.