The US housing market began the year in a state of rebalance, with many buyers and
sellers remaining cautious while they wait to see where the market is headed. Nationally,
pending sales rose 2.5% month-to-month, marking the first increase since May, while
sales of existing homes fell 1.5% as of last measure, according to the National
Association of Realtors® (NAR). Demand for housing persists, but higher mortgage
interest rates have cut into housing affordability, with total home sales down 17.8% last
year compared to 2021.
New Listings in the Twin Cities region decreased 10.6 percent to 3,285. Pending Sales
were down 19.3 percent to 2,560. Inventory levels rose 14.5 percent to 5,588 units.
Prices continued to gain traction. The Median Sales Price increased 2.7 percent to
$341,995. Days on Market was up 46.3 percent to 60 days. Buyers felt empowered as
Months Supply of Homes for Sale was up 44.4 percent to 1.3 months.
As sales slow, time on market is increasing, with the average home spending 26 days on
market as of last measure, according to NAR. Seller concessions have made a
comeback, giving buyers more time and negotiating power when shopping for a home.
Although home prices remain high, mortgage rates declined steadily throughout
January, falling to their lowest level since September, sparking a recent surge in
mortgage demand. Lower rates should aid in affordability and may soon lead to an
uptick in market activity ahead of the spring selling season.