September and Twin Cities Real Estate

In August, the housing market experienced a notable shift, with a 36% increase in homes listed for sale compared to the previous year. For buyers, this means more options and less pressure in a competitive market. This boost in inventory is also starting to cool prices, with the median home price dropping slightly from $437,450 in July to $429,990 in August—a 2% decrease.

As we approach the presidential election season, the real estate market tends to slow down, as uncertainty can cause buyers to hesitate. Many are holding off in anticipation of further interest rate cuts, hoping for better deals in the near future. This could lead to a surge in demand in spring 2025, potentially making it a particularly active season.

Mortgage rates are already on the decline. The average 15-year fixed mortgage rate fell from 6.14% in July to 5.68% in August, and more recently to 5.47%, marking the lowest level since February 2023. This drop in rates is giving buyers more financial flexibility and potential buyers have responded quickly to the rate decreases - last week saw an increase of 14.2% in mortgage applications over the week prior.

Another sign of market cooling is the increase in the median days homes spend on the market. In August 2024, homes stayed on the market for 53 days, compared to 46 days last year, as high costs make some buyers hesitant.

Looking ahead, home prices are expected to stabilize. While CoreLogic reports a 4.3% year-over-year price increase for July 2024, this growth is slowing. Modest price increases of around 2.2% are expected over the next year, offering buyers and sellers opportunities as the market adjusts.

For buyers and sellers, the evolving landscape of falling rates and steadying prices will create unique opportunities this fall.

If you're wondering how all this will uniquely affect your buying and selling timeframe, please reach out!