MINNEAPOLIS (February 10, 2022) — Strong buyer demand and a shrinking number of homes for sale in Minnesota drove prices up in January. Closed sales of residential homes were down 9.9% compared to January 2021, while inventory plummeted 24.3%. As homebuyers competed in a tight market, the median price rose 8.5% to $295,000. The affordability index, which measures whether a typical family earns enough income to qualify for a mortgage loan on the average home, was down 15.4% over last year. New listings dropped 11.2% and there were only 6,631 homes for sale across the state, 24.3% less than a year ago. It is still a seller’s market, as homeowners received 98.7% of their asking price, an increase of 0.4%.“As the year opens, inventory shortages continue to frustrate many buyers. And those that do close on homes are paying significantly more,” said Chris Galler, CEO of Minnesota Realtors. “Affordability is a significant concern as home prices increase faster than wages. Also, the Federal Reserve has indicated they will increase interest rates in the next few weeks. Higher interest rates, higher home prices and low inventory levels will challenge many first-time home buyers trying to enter the marketplace.”
January year-over-year summary of key market indicators:
- Closed sales decreased 9.9% to 4,365
- Median sales price increased 8.5% to $295,000
- Average sales price increased 9.0% to $338,754
- New listings decreased 11.2% to 4,791
- Pending sales decreased 10.9% to 4,497
- Days on the market decreased 10.9% to 41 days
- Homes for sale decreased 24.3% to 6,631
Closed Home Sales Across Minnesota by Region
In January, closed sales declined in 11 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 9.9% year over year. Two regions reported increases, with Southwest Central marking double-digit gains, at 10.4%, and South Central at 7.8%. Seven regions saw double-digit closed home sale declines. The largest of these were North Central, down 40.9%, East Central, down 24.6%, and Northwest, down 24.4%. See the chart below for more details comparing closed home sales for January 2022 to January 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.