Interest rates and inflation give buyers pause
MINNEAPOLIS (September 13, 2022) — In August, closed sales were down 17% compared to a year ago, with 8,256 transactions across the state. New listings followed the cooling trend, falling 17.9% compared to last August even as the total number of homes for sale increased by 2% to 13,271. This bumped up the supply of homes on the market to 1.9 months, an 18.8% gain over last year. Although the median sales price increased 4.4% to $330,000, sellers were receiving slightly less than their asking price, down 2.2% to 99.3%. Homes were sitting longer, too, with days on the market averaging 29 days, up 7.4% from August 2021.
“The trend toward more normal market conditions continued in August, signaling a more buyer-friendly environment,” said Chris Galler, CEO of Minnesota Realtors. “Although homes with desirable features in an affordable price range are still fueling competition, the frantic ‘drive-by buying’ of a year ago is over. With an increasing supply of properties to choose from, buyers are becoming more thoughtful and discerning, and less likely to rush a purchase. Rising interest rates and the broader inflationary environment has also dampened activity. Still, for buyers with the means to go forward, this is a good time to find the right home without the stress and pressure of a heated market.”
- Closed sales decreased 17.0% to 8,256
- Median sales price increased 4.4% to $330,000
- Average sales price increased 4.6% to $383,759
- New listings decreased 17.9% to 9,033
- Pending sales decreased 19.0% to 7,592
- Days on the market increased 7.4% to 29 days
- Homes for sale increased 2.0% to 13,271
Closed Home Sales Across Minnesota by Region
In August, closed sales declined in 9 out of 13 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 17% year over year. Four regions reported increases: Northwest at 23.6%, Upper MN Valley at 7.1%, West Central at 7%, and Southwest at 0.8%. The smallest declines were seen in Headwaters at 0.8%, South Central at 2.1%, and North Central at 9.9%. The largest declines were reported in East Central at 19.8%, 7-County Twin Cities at 20.1% and Central at 26.2%. See the chart below for more details comparing closed home sales for August 2022 to August 2021.
The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on
which MAR & SPAAR local associations report.