The December 17 release of Freddie Mac’s Primary Mortgage Market Survey® (PMMS®) results shows fixed mortgage rates ticking slightly higher for the second week in a row amid the Federal Reserve’s decision to raise short-term interest rates for the first time since 2006.
For Week Ending December 5, 2015
Low unemployment and cheap fuel are conspiring to help people spend money this holiday season, but not necessarily more than last year at this time. Early analysis of year-end shopping habits indicates a fairly average amount of purchases being made across the board, with items like clothing and electronics doing well, while automobiles and home goods are in mild sales decline. It all adds up to a mostly fiscally sound bunch of Americans who will not be coaxed into purchasing more than they want or can pay for. We have come a long way since the Great Recession, and the housing market is benefiting from smarter spending.
In the Twin Cities region, for the week ending December 5:
For the month of November:
All comparisons are to 2014
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
With warmer than usual temperatures, impressive job and wage growth and still attractive interest rates, strong home purchase demand continued into November. Pending sales rose 18.1 percent to 3,497 signed contracts; new listings increased 11.5 percent to 3,785 homes. That’s the largest year-over-year increase since June of this year for pending sales, and the largest gain since March for new listings. Inventory levels fell 18.5 percent to 12,984 active units. Persistently low levels of for-sale properties can be a challenge for some buyers. Prices continued to rise as the median sales price gained 7.3 percent to arrive at $219,900. The median list price rose 4.6 percent to $229,995, while the price per square foot rose 6.1 percent to $127.
Due to the low supply and high demand environment, the percent of original list price received at sale was up 1.2 percent to 95.8 percent. Sellers also accepted offers in less time than last November. Days on market declined 7.6 percent to 73 days. Months supply of inventory fell 25.6 percent to 3.2 months—the lowest level on record in almost 12 years. Generally, five to six months of supply is considered balanced. While the metro as a whole is favoring sellers, not all areas, segments or price points reflect that.
“Buyers have truly been out in force this year,” said Mike Hoffman, Minneapolis Area Association of REALTORS® (MAAR) President. “While we’re encouraged by modest increases in seller activity, it’s simply not enough to meet the demand brought on by attractive rates, rising rents and an accelerating labor market. The nice weather has certainly helped.”
Region-wide indicators offer useful insights, but it’s important to dive into individual areas and segments. The percentage of sales that were foreclosure or short sale fell to 11.0 percent as traditional sales rose 21.4 percent. Single-family sales had the strongest gain of any property type, followed by townhomes and condos, respectively. Previously-owned sales increased at nearly twice the rate of new construction. Sales activity in the lowest price range ($150,000 and below) declined 19.3 percent while activity in all other price ranges is rising (homes priced at $400,000 and above had a 15.9 percent sales increase). Though it’s not yet the case for the region, home prices across several local markets including St. Louis Park, Edina and Southwest Minneapolis have reached record highs.
The November jobs numbers beat expectations and were accompanied by upward revisions to September and October. Wages are growing at their fastest pace in six years—an encouraging sign that should offset declining affordability brought on by rising prices and interest rates and facilitate larger down payments. The latest Bureau of Labor Statistics figures also show the Minneapolis-St. Paul-Bloomington metropolitan area had the lowest unemployment rate of any major metro area at 3.1 percent compared to 5.0 percent nationally. Mortgage rates are still around 4.0 percent compared to a long-term average of about 8.0 percent. A rate hike at the Federal Reserve is widely expected in December, though changes in mortgage rates will be slow and incremental and shouldn’t disrupt the recovery.
“With all but one month of 2015 in the books, we’re really starting to see how the year will stack up,” said Judy Shields, MAAR President-Elect. “Since consumer demand for housing has fully recovered, the seller component is still the missing puzzle piece.”
From The Skinny Blog.
For Week Ending November 28, 2015
The real estate market tends to hit its slowest moments right around the Thanksgiving holiday, continuing through to the end of the year before bouncing back with renewed resolutionary enthusiasm. The trends aren’t expected to change too much in year-over-year comparisons to what we have seen over the last several weeks. For this week, listings and sales are up.
In the Twin Cities region, for the week ending November 28:
For the month of October:
All comparisons are to 2014
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
For Week Ending November 21, 2015
We’re still looking at better-than-expected new listing and sales activity in most markets across the country, while overall inventory and months’ supply of inventory remains down. While the addition of new listings and an increase in sales activity will not always be up in year-over-year comparisons on a weekly basis, the trend has remained rather optimistic into the year-end months that typically see a slowness in residential real estate activity. Anecdotally, this feels like a response to the inevitable rate hike that is coming before 2015 is complete.
In the Twin Cities region, for the week ending November 21:
For the month of October:
All comparisons are to 2014
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
For Week Ending July 4, 2015
As fireworks go boom, the boom of housing’s summer selling season tends to relax across the country, giving way to Facebook photos of families and friends at picnics and on road trips. Amidst the red, white and blue Instagram filters and patriotic Twitter profile pics, you’ll still likely see evidence of sales being made and articles about overall affordability. So take a quick break to play catch or chomp a hot dog, because the homeownership dream is alive and thriving this summer.
In the Twin Cities region, for the week ending July 4:
For the month of June:
All comparisons are to 2014
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
The Twin Cities metropolitan housing market reached key milestones in June. Both pending purchase demand and closed unit sales officially reached 10-year highs. The last time demand was this strong was June 2005. The number of signed purchase agreements rose 19.2 percent to 6,266. Closed sales increased 22.0 percent to 6,928. Seller activity showed more modest gains compared to last year. New listings rose 4.6 percent to 8,678 during the month, which is a multi-year high. It’s the highest number of new listings for any month since April 2010. Excluding March and April of 2010, new listings were at their highest level for any month since June 2008. Despite that, the number of available properties fell 9.4 percent to 16,597 homes.
“Buyers have been extraordinarily active this spring and summer,” said Mike Hoffman, Minneapolis Area Association of REALTORS® (MAAR) President. “With both pending and closed sales activity officially reaching 10-year highs, consumers— particularly first-time buyers—understand that the timing is right. Therefore, sellers are also getting strong offers quickly.”
Given all this demand, the June 2015 median sales price climbed 4.7 percent to $229,900. That puts home prices within about 3.5 percent of the June 2006 record high of $238,000. However, the typical price per square foot, now at $128, is about 18.5 percent below its June 2006 record high.
The market landscape continues to favor sellers, even though it is still a historically attractive time to purchase real property. Because of the ongoing imbalance between supply and demand, the number of days a listing spends on the market fell 5.7 percent to 66 days. Sellers are accepting 97.8 percent of their original list price and 99.6 percent of their last list price. The Twin Cities metropolitan area currently has 3.6 months’ supply of inventory, which still signals a seller’s market. That figure dropped 18.2 percent from June 2014. This measure is essentially a ratio of supply and demand and indicates how long it would take to completely clear the market of all inventory assuming no new homes enter the marketplace.
According to the Federal Reserve, interest rates could still rise slowly later this year if the economy continues to perform well as it has been. Mortgage rates continue to hover on either side of 4.0 percent, compared with a long-term average of over 7.0 percent. The most recent data from the Bureau of Labor Statistics shows the Minneapolis-St. Paul-Bloomington metropolitan area has the third lowest unemployment rate of any major metro. That puts our region behind only sister cities Austin, TX and Salt Lake City, UT. Minnesota and the Twin Cities specifically are uniquely well positioned to compete in today’s global economy.
“With positive momentum in housing and the economy, agents across the region are helping buyers and sellers achieve their real estate goals,” said Judy Shields, MAAR President-Elect. “Since most sellers are also buyers, those sitting on the fence may not want to wait to make their move.”
From The Skinny Blog.
The July 9 release of Freddie Mac’s Primary Mortgage Market Survey® (PMMS®) results shows an investor flight to safety for U.S. Treasuries is pushing average fixed mortgage rates lower.