Minnesota Housing Inventory Hits Seven-Year High in August
New listings surged 7.1% in August, pushing statewide inventory to its highest level since 2017. This shift grants buyers more negotiation power, yet median prices continue to climb.
Minnesota housing inventory reached a seven-year high in August. New listings increased by 7.1% to 9,570 homes statewide. The Twin Cities metro area saw a sharper rise of 8.2% to 6,481 listings. This marks the seventh consecutive month of listing growth in both regions. Statewide supply now exceeds 20,000 active listings. Supply is up more than 10% compared to the same period last year.
Pending sales declined for the first time in five months. This drop signals a cooling in transaction volume despite higher availability. Buyers now face a more balanced market environment. The number of months of supply stands at 3.5. This figure is historically low but represents the most balanced August since 2017. A fully healthy market typically requires five to six months of supply.
Buyers gain negotiation leverage
Homes are staying on the market longer. The average time to sell is 51 days statewide. In the metro area, the average is 45 days. Sellers accepted 97.5% of their list price. Metro sellers accepted 98.2% of their asking price. Both figures are slightly lower than last year. Reduced competition allows buyers to negotiate more effectively. Wendy Uzelac, President of Minnesota Realtors, noted that buyers have become more active. She stated that prices are rising at a sustainable pace.
Market performance varies by property type and location. Sales of homes under $400,000 fell by 2%. Sales of homes over $1 million rose by 15.5%. Single-family home sales increased by 1%. Condo sales dropped by 4.3%. Townhome sales declined by 2.5%. Sales in Minneapolis fell by 1.6%. Sales in St. Paul dropped by 12.6%. Danielle Bickham Pelton of the Saint Paul Area Association of REALTORS said St. Paul faces headwinds. She expects stronger listing activity to help buyers in coming months.
Prices rise despite affordability strain
Median sales prices continue to increase. The statewide median price rose 2.8% to $370,000. The Twin Cities median price climbed 1.3% to $405,000. Price growth remains positive despite easing demand. Strength in the luxury segment supports this trend. Elevated mortgage rates strain buyer affordability. Rising taxes and insurance costs add to the burden. Inflation continues to erode wage gains.
Energy prices are rising due to geopolitical conflicts. This contributes to ongoing inflationary pressure. Inflation has moderated from its spring peak. However, it remains above the Federal Reserve target. Interest rate outlooks remain uncertain. The data for August comes from the GN auto markets/housing report. This source provides detailed insights into regional housing trends. The market shows signs of stability but remains strained.
