New listings shrink, interest rates creep up, and demand remains high
MINNEAPOLIS (May 10, 2022) — With closed sales down by almost 11% over last April, the sales season was off to a comparatively slower start. Historically, the numbers indicated a return to more normal patterns for this time of year. Declines in new listings, which were down nearly 7% compared to a year ago, contributed to softening sales. Statewide, there were 8,567 homes for sale, down 9.6% from April 2021. This equates to just over a one-month supply of properties on the market, a trend that has persisted since the end of 2020. Despite the limited inventory, buyer demand remains high, pushing the median home sales price in Minnesota up 11.5% to $340,000. On average, sellers received 102.8% percent of their asking price, a 0.7% increase over April 2021.
“As low inventories and high consumer demand have become the new normal, market pressures continue driving up the median price of a home,” said Chris Galler, CEO of Minnesota Realtors. “Interest rates continue to rise, too. A 30-year fixed mortgage is now 5.6% and still climbing. That’s why the affordability index, which measures whether the average family earns enough to obtain a mortgage on a typical home, dropped 29% over last year. This environment disproportionately impacts lower- and mid-income buyers—especially first-time homebuyers. Increasing the availability of affordable homes calls for a range of solutions, from down-payment assistance and more new construction to incentives for fence-sitting homeowners to sell their properties. There are no magic bullets, but over time these approaches will yield good results.”
April year-over-year summary of key market indicators:
- Closed sales decreased 10.9% to 6,444
- Median sales price increased 11.5% to $340,000
- Average sales price increased 12.6% to $388,667
- New listings decreased 6.7% to 9,814
- Pending sales decreased 9.5% to 8,124
- Days on the market decreased 16.7% to 30 days
- Homes for sale decreased 9.6% to 8,567
Closed Home Sales Across Minnesota by Region
In April, closed sales declined in 12 out of 13 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 10.9% year over year. Only one region reported an increase: Southwest Central at 3.6%. The smallest declines were seen in Southeast at 7.3%, 7-County Twin Cities at 8.5%, and Southwest at 8.9%. The largest declines were reported in South Central at 19.8%, Headwaters at 22.9%, and West Central at 28.6%. See the chart below for more details comparing closed home sales for April 2022 to April 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, onwhich MAR & SPAAR local associations report.