Home sellers in the Twin Cities still have a substantial advantage over buyers, but buyers gained considerable ground last month as listings increased and competition eased slightly.
Last month there was a nearly 16% annual increase in the number of homes for sale across the metro — the most for any May in at least four years, according to the Minneapolis Area Realtors. At the same time, buyers signed 5% fewer purchase agreements than a year ago, giving them more choices than they’ve had in many months.
Despite the decline in pending sales, closings — a reflection of deals signed in recent months — rose 10.5% over last year, causing the median price of those properties to increase 4.1% to $385,000.
Meanwhile, in a separate report, statewide prices rose to a record $350,000.
“While the market is undergoing corrections, it is not a balanced market yet,” Amy Peterson, president of the St. Paul Area Association of Realtors, said in a statement.
The housing market is considered evenly balanced between buyers and sellers when there are enough houses to last four to six months. It’s been years since that’s been the case. More listings, however, helped ease the logjam. Last month, there were enough houses on the market to last 2.3 months, a 21% increase over last year.
“Buyers need to remain both persistent and strategic ensuring their monthly payments align with their financial plans,” Peterson said.
The housing market in the Twin Cities has remained remarkably resilient despite record home prices and mortgage rates hovering around 7%. The May report shows that while there’s still pent-up demand in every price range, there are signs waning affordability is having an impact on some buyers.