Pending home sales rise, but prices plummet

That foreclosure mess keeps getting in the way of a good time for the housing market. While pending homes sales during January rose 3.7 percent in the Twin Cities metro area — the highest on record since 2007 and a good indicator for the spring market - a big jump in the number of distress sales caused the median sale price during the month fall to 10.8 percent to $140,000, according to data released Friday by Realtors' associations in Minneapolis and St. Paul. The increase in sales during the month was also the first year-over-year monthly increase since the expiration of the federal home buyer's tax credit at the end of April. Nearly half of all sales during the month were distress sales, which caused the median sale price to plummet. To highlight the impact of those distress sales, the median sale price of traditional listings actually rose 1.9 percent during January. Though mortgage interest rates rose to about 5 percent (the average for a 30-year fixed-rate mortgage) this week for the first time since last spring, the big decline in sale prices means that housing affordability in the Twin Cities is at record levels.