Home buyers in the Twin Cities last month had far more options than they did last year, but buyers still outpaced sellers in many parts of the 16-county metro, pushing prices to new highs.
The Minneapolis Area Realtors' monthly sales report released Monday also shows that new property listings during April were up nearly 22% compared with last year. That gain was primarily the result of the pandemic-related pause in buying and selling last year.
"It's promising to see improvements in housing supply, but it's clear that we aren't out of the woods just yet," said Todd Walker, president of Minneapolis Area Realtors, in a statement.
During April, there were 7,468 new listings, a nearly 22% increase over the previous year but on par with 2018 and 2019. At the same time, buyers signed 6,220 purchase agreements, a nearly 34% increase over last year and 8% higher than 2019. With buyers paying 103% of what sellers were asking, the median price of all metro-area closings was $337,000, a 10.5% annual increase and a new record.
The housing market throughout the Twin Cities metro has been driven by historically low mortgage rates that have helped offset rising home prices.
On Thursday, the average 30-year fixed-rate mortgage was 2.94%, with an average 0.7 discount point for the week ending May 13, according to Freddie Mac's weekly mortgage-rate survey. That was down from last week when it averaged 2.96% and 3.28% a year ago. During April alone, rates dipped nearly a quarter percentage point.
"Although a limited supply is driving prices higher, low rates are a strong incentive to offer a competitive bid for a home," said Tracy Baglio, president of the St. Paul Area Association of Realtors, in a statement.
At the end of April, just 5,619 properties were on the market, 46% fewer than last year at the same time. And with so few listings and buyers eager to take advantage of low rates, houses have been selling swiftly. On average, houses sold in just 31 days, with half of all sellers finding buyers within eight days of listing their home — the fastest time in at least 14 years.
Demand was strong in both the cities and the suburbs, with sales of single-family homes increasing 32% in Minneapolis and nearly 15% in St. Paul. Sales of condominiums, which slipped last year, rose nearly 51% throughout the metro, outpacing both single-family and townhomes.
Low mortgage rates are also bolstering demand for year-round and seasonal properties outside the metro. Eleven of the 13 economic development regions across the state tracked by the Minnesota Realtors group saw annual gains in sale prices and closings with eight regions posting double-digit gains in sales.
"The year-over-year growth is impressive given where we were last year with the pandemic shutting down activity and creating uncertainty in the market, said Chris Galler, CEO of Minnesota Realtors. "The ongoing inventory shortage is pushing values to unreachable heights and pricing many — especially first-time homebuyers — out of the market."