I’m excited about what I anticipate will be a very active fall housing market across the twin cities. The market is gradually self-correcting after a few years of general volatility related to high mortgage rates, historic low inventory of homes for sale, and a variety of affordability challenges that have kept many hopeful buyers and sellers frozen in place.
Let’s look at some key data points that will help paint a picture of where we’ve been and where we’re going, starting with median sale price.
Don’t believe anyone who tells you home prices will fall in the next several years. This is simply not an opinion supported by the data, or the nation’s leading economists and market experts. If you’re a homeowner who’s been thinking about selling, the current market still generally favors sellers because of low inventory. One of my listings just sold in about 8 hours, first day on the market, well above asking price. Of course it was strategically priced, well staged, marketed, etc., but it’s still generally a seller’s market.
While still very low across not just the state but also the country, inventory of available housing is definitely trending upward, as the graph below shows.
The metric “Months Supply of Inventory” (MSI) is defined as the number of months it would take to sell through houses currently for sale. Somewhere around 5 MSI is considered a balanced market, and we’re trending in that direction.
One of the biggest factors keeping homeowners from selling and consumers from buying what inventory is available, is rates (duh). There’s good news on this front.
As the chart below shows, mortgage rates have decreased significantly over the summer, and this is independent of the fact that there has not been a single cut to the Federal interest rate in 4 years.
But of course 6.5% is hardly enough of a drop to motivate those of us who are land-locked with a sub-3% rate to sell our home for any reason outside of necessity (divorce, relocation, etc.). Fortunately, the Fed will almost certainly make a cut to the interest rate in late September. By how much is anyone’s guess, but we’ll know after the next meeting scheduled for 9/17.
I hope you’ve found this information helpful. If you’re considering a move – whether buying or selling – I’d love the opportunity to learn all about your needs and goals, and am happy to provide more value by way of a detailed comparative market analysis, home equity assessment, robust home search, etc. I hope to hear from you!
Call or text me anytime at 952-452-0089
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