What You Can Expect from the Spring Housing Market

 

As the spring housing market kicks off, you likely want to know what you can expect this season when it comes to buying or selling a house. While there are multiple factors causing some uncertainty, including the conflict overseas, rising inflation, and the first rate increase from the Federal Reserve in over three years — the housing market seems to be relatively immune.

Here’s a look at what experts say you can expect this spring.

 

1. Mortgage Rates Will Climb

Freddie Mac reports the 30-year fixed mortgage rate has increased by more than a full point in the past six months. And despite some mild fluctuation in recent weeks, experts believe rates will continue to edge up over the next 90 days. As Freddie Mac says:

 

“The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”

 

If you’re a first-time buyer or a seller thinking of moving to a home that better fits your needs, realize that waiting will likely mean you’ll pay a higher mortgage rate on your purchase. And that higher rate drives up your monthly payment and can really add up over the life of your loan.

 

2. Housing Inventory Will Increase

There may be some relief coming for buyers searching for a home to purchase. Realtor.com recently reported that the number of newly listed homes has grown for each of the last two months. Also, the National Association of Realtors (NAR) just announced the months’ supply of inventory increased for the first time in eight months. The inventory of existing homes usually grows every spring, and it seems, based on recent activity, the next 90 days could bring more listings to the market.

 

If you’re a buyer who has been frustrated with the limited supply of homes available for sale, it looks like you could find some relief this spring. However, be prepared to act quickly if you find the right home.

 

If you’re a seller, listing now instead of waiting for this additional competition to hit the market makes sense. Your leverage in any negotiation during the sale will be impacted as additional homes come to market.

 

3. Home Prices Will Rise

Prices are always determined by supply and demand. Though the number of homes entering the market is increasing, buyer demand remains very strong. As realtor.com explains in their most recent Housing Report:

 

“During the final two weeks of the month, more new sellers entered the market than during the same time last year. . . . However, with 5.8 million new homes missing from the market and millions of millennials at first-time buying ages, housing supply faces a long road to catching up with demand.”

 

What does that mean for you? With the demand for housing still outpacing supply, home prices will continue to appreciate. Many experts believe the level of appreciation will decelerate from the high double-digit levels we’ve seen over the last two years. That means prices will continue to climb, just at a more moderate pace. Most experts are predicting home prices will not depreciate.

 

 

Won’t Increasing Mortgage Rates Cause Home Prices To Fall?

While some people may believe a 1% increase in mortgage rates will impact demand so dramatically that home prices will have to fall, experts say otherwise. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, says:

 

“What I will caution against is making the inference that interest rates have a direct impact on house prices. That is not true.”

 

Freddie Mac studied the impact that mortgage rates increasing by at least 1% has had on home prices in the past. Here are the results of that study:

 

As the chart shows, mortgage rates jumped by at least 1% six times in the last thirty years. In each case, home values increased.

So again, if you’re a first-time buyer or a repeat buyer, waiting to buy likely means you’ll pay more for a home later in the year (as compared to its current value).

 

Bottom Line

There are three things that seem certain going into the spring housing market:

1. Mortgage rates will continue to rise
2. The selection of homes available for sale will modestly improve
3. Home prices will continue to appreciate, just at a slightly slower pace

 

If you’re thinking of buying, act now before mortgage rates and home prices increase further. If you’re thinking of selling, your best bet may be to sell soon so you can beat the increase in competition that’s about to come to market.

Want Top Dollar for Your House? Now’s the Time To List It

 

When you’re selling any item, you usually want to sell it for the greatest profit possible. That happens when there’s a strong demand and a limited supply for that item. In the real estate market, that time is right now. If you’re thinking of selling your house this year, here are two reasons why now’s the time to list.

 

1. Demand Is Very Strong This Winter

A recent article in Inman News explains:

 

“Spring, the hottest time of year for homebuyers and sellers, has started early, according to economists. . . . ‘Home shopping season appears to already be in full swing!’”

 

And they aren’t the only ones saying buyers are already out in full force. That claim is backed up with data released last week by ShowingTime. The ShowingTime Showing Index tracks the average number of monthly buyer showings on active residential properties, which is a highly reliable leading indicator of current and future trends for buyer demand. The latest index reveals this December was the most active December in five years (see graph below):

 

As the data indicates, buyers are very active this winter. Last December saw even more showings than December of 2020, which was already a stronger-than-usual winter. And remember – you want to sell something when there’s a strong demand for that item. That time is now.

 

2. Housing Supply Is Extremely Low

Each month, realtor.com releases data on the number of active residential real estate listings (listings currently for sale). Their most recent report reveals the latest monthly number is the lowest we’ve seen in any January since 2017.

 

And don’t forget, the best time to sell an item is when there’s a limited supply of it available. This graph clearly shows how extremely low housing supply is today.

 

Even Though Supply Is at a Historic Low, Home Sales Are at a 15-Year High

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), existing-home sales totaled 6.12 million in 2021 – the highest annual level since 2006. This means the market is hot and homeowners are in a great place to sell now while sales are so strong.

 

NAR also reports available listings by calculating the current months’ supply of inventory. They explain:

 

“Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.”

 

The current 1.8-months’ supply is the lowest ever reported. Here are the December numbers over the last five years (see graph below):

 

The ratio of buyers to sellers favors homeowners right now to a greater degree than at any other time in history. Buyer demand is high, and supply is low. That gives sellers like you an incredible opportunity.

 

Bottom Line

If you agree the best time to sell anything is when demand is high and supply is low, let’s connect to begin discussing the process of listing your house today.

Weekly Market Activity Report For Week Ending July 2, 2016

The United Kingdom vote for exit from the European Union (Brexit) has likely
already had at least one short-term effect on the U.S. housing market. The decision
to not raise interest rates until later this year was likely made because of Brexit, so
unrest in financial markets can be watched further with hopes of stabilization. Longterm
effects may include more or less foreign investment in U.S. residential real
estate, but wholesale price declines are not expected any time soon.

In the Twin Cities region, for the week ending July 2:
 • New Listings increased 24.2% to 1,589
 • Pending Sales increased 12.9% to 1,351
 • Inventory decreased 17.7% to 14,480

For the month of June:
 • Median Sales Price increased 5.3% to $242,000
 • Days on Market decreased 16.7% to 55
 • Percent of Original List Price Received increased 1.0% to 98.7%
 • Months Supply of Homes For Sale decreased 23.7% to 2.9

Publish Date: July 11, 2016 • All comparisons are to 2015

Weekly Market Activity Report For Week Ending June 18, 2016

Like summer temperatures, home prices continue to inch up in most housing
categories and geographic submarkets. Meanwhile, hopeful buyers are wishing for
more options to fulfill the perfect fit. As we reach deeper into summer, dips in home
sales are not unexpected. Even while people search for homes in which to move or
start a family, summer is also about family time in other ways.

In the Twin Cities region, for the week ending June 18:
 • New Listings decreased 4.2% to 1,967
 • Pending Sales increased 1.9% to 1,389
 • Inventory decreased 19.0% to 14,085

For the month of May:
 • Median Sales Price increased 5.8% to $236,900
 • Days on Market decreased 21.1% to 60
 • Percent of Original List Price Received increased 1.1% to 98.6%
 • Months Supply of Homes For Sale decreased 26.3% to 2.8

Publish Date: June 27, 2016 • All comparisons are to 2015

Weekly Market Activity Report For Week Ending June 11, 2016

The pace of new homes being built is slower than necessary to keep inventory
figures up, especially in a time with plenty of demand. However, building permits
are active and low mortgage rates continue to provide opportunity for the
residential real estate market to continue to be a pillar of the national economic
profile.

In the Twin Cities region, for the week ending June 11:
• New Listings decreased 0.3 percent to 2,056
• Pending Sales decreased 7.1% to 1,370
• Inventory decreased 19.2% to 13,869

For the month of May:
• Median Sales Price increased 5.8% to $236,900
• Days on Market decreased 21.1% to 60
• Percent of Original List Price Received increased 1.1% to 98.6%
• Months Supply of Homes For Sale decreased 26.3% to 2.8

Publish Date: June 20, 2016 • All comparisons are to 2015

Weekly Market Activity Report For Week Ending May 28, 2016

The trends of higher sales and fewer homes for sale that prevailed through the first quarter of 2016 have only gotten stronger through the second quarter. Although more sellers are listing than at this time last year, it's still not quite enough to keep up with the heat of today's sales environment. Buyers appear to be making great offers ahead of any hint of higher mortgage rates.

In the Twin Cities region, for the week ending May 28:
• New Listings increased 2.5% to 1,734
• Pending Sales increased 18.6% to 1,597
• Inventory decreased 18.8% to 13,669

For the month of April:
• Median Sales Price increased 7.6% to $231,341
• Days on Market decreased 14.1% to 73
• Percent of Original List Price Received increased 1.0% to 98.0%
• Months Supply of Homes For Sale decreased 25.0% to 2.7

Publish Date: June 6, 2016 • All comparisons are to 2015

Weekly Market Update For Week Ending January 23, 2016

We're just breaking into 2016, so it's a bit early to say how the spring and summer markets are going to fare based on a few weeks of trend analysis, but for the most part, things are happening the way we expected to start the year. There are some nibbles of new listings being added to the market, and sales are taking root, but the overall number of homes for sale has some work to do in order to give this year the real steam it deserves.

In the Twin Cities region, for the week ending January 23:
 • New Listings decreased 14.2% to 908
 • Pending Sales increased 12.1% to 725
 • Inventory decreased 20.7% to 10,403

For the month of December:
 • Median Sales Price increased 9.9% to $219,900
 • Days on Market decreased 11.2% to 79
 • Percent of Original List Price Received increased 1.3% to 95.4%
 • Months Supply of Inventory decreased 31.3% to 2.2

Publish Date: February 1, 2016 • All comparisons are to 2015
Source: Minneapolis Area Association of Realtors

Weekly Market Update: For Week Ending January 16, 2016

A pattern is emerging that shows a fresh willingness by sellers to put homes on the market and buyers to enter the market. New listings are on the rise, if not in yearover-year comparison, then certainly in week-over-week views, as we bounce well past the new year. Inventory is seemingly unfazed by the new 2016 calendar on the wall, as the trend line has remained roughly the same for the first weeks in January as the last weeks in December. If sales activity builds on what's happening now and reaches a slow boil, it would be surprising if more inventory mix wasn't added to the water soon.

In the Twin Cities region, for the week ending January 16:
 • New Listings decreased 8.8% to 978
 • Pending Sales increased 3.5% to 672
 • Inventory decreased 20.3% to 10,392

For the month of December:
 • Median Sales Price increased 9.9% to $219,900
 • Days on Market decreased 11.2% to 79
 • Percent of Original List Price Received increased 1.3% to 95.4%
 • Months Supply of Inventory decreased 31.3% to 2.2

Publish Date: January 25, 2016 • All comparisons are to 2015
Source: Minneapolis Area Association of Realtors

Weekly Market Update For Week Ending January 9, 2016

We are just getting started into 2016 residential real estate market activity, but early indicators are pointing to a positive start. Home sales are expected to have a healthy amount of growth in 2016, but along with the rise in sales, modest increases in home prices are also expected. Low mortgage rates are an unexpected ray of sunshine this week, amidst typical winter doldrums.

In the Twin Cities region, for the week ending January 9:
 • New Listings increased 11.3% to 1,144
 • Pending Sales increased 15.3% to 708
 • Inventory decreased 20.8% to 10,293

For the month of December:
 • Median Sales Price increased 9.9% to $219,900
 • Days on Market decreased 12.4% to 78
 • Percent of Original List Price Received increased 1.3% to 95.4%
 • Months Supply of Inventory decreased 31.3% to 2.2

Publish Date: January 18, 2016 • All comparisons are to 2015
Source: Minneapolis Area Association of REALTORS®

Weekly Market Update: Week Ending January 2nd, 2016

Optimism is in the air as we turn to face a new calendar year. As far as residential real estate goes, there is plenty to feel positive about. Buying and selling activity continued through the final months of 2015, and there's little reason to believe that trend will slow down during the first month of 2016. If anything, the past few years have indicated a tendency for listings and sales to increase in January.

In the Twin Cities region, for the week ending January 2:
 • New Listings decreased 24.8% to 416
 • Pending Sales increased 2.2% to 550
 • Inventory decreased 19.5% to 11,175

For the month of December:
 • Median Sales Price increased 9.9% to $219,900
 • Days on Market decreased 12.4% to 78
 • Percent of Original List Price Received increased 1.4% to 95.5%
 • Months Supply of Inventory decreased 34.4% to 2.1

Source: Minneapolis Area Association of Realtors
Publish Date: January 11, 2016 • All comparisons are to 2015

Weekly Market Update: Week Ending December 26th, 2015

As another year winds down, we'll be looking toward 2016 with increased interest in changes in trend lines. But as we've seen over the last several months, and now beginning to become multiple years, the trends have been pretty steady. The prevailing thought by national market watchers is that 2016 will largely mirror 2015 but at a more even pace. The continuation of Fed rate increases are expected to keep things in check, but the funny thing about anticipating those increases is that it tends to inspire more activity. Happy New Year!



In the Twin Cities region, for the week ending December 26:

• New Listings increased 0.7% to 271

• Pending Sales increased 39.6% to 483

• Inventory decreased 19.3% to 11,519


For the month of November:

• Median Sales Price increased 6.8% to $219,040

• Days on Market decreased 7.6% to 73

• Percent of Original List Price Received increased 1.2% to 95.8%

• Months Supply of Inventory decreased 28.2% to 2.8

Weekly Market Update: November 16, 2015

In a continually improving economy, what we might expect to happen is happening in the housing market. Sales and prices are generally up in year over-year comparisons, and new listings are replenishing the market at a fairly steady clip. More sellers are still encouraged to enter the fray, as lower inventory continues to remain a point of some concern.

In the Twin Cities region, for the week ending November 7:

 • New Listings increased 7.5% to 1,183
 • Pending Sales increased 10.7% to 907
 • Inventory decreased 16.2% to 14,850

For the month of October:

 • Median Sales Price increased 4.4% to $217,000
 • Days on Market decreased 2.8% to 70
 • Percent of Original List Price Received increased 1.1% to 96.2%
 • Months Supply of Inventory decreased 25.6% to 3.2

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: November 9, 2015

Weekly figures show seller activity switching between year-over-year gains and losses while buyer activity steadily marches higher. That type of environment has translated into inventory declines between 12.0 and 17.0 percent over the last several weeks. Interest rates are still around 4.0 percent, but a surprisingly strong jobs report could spell upward rate pressure.

In the Twin Cities region, for the week ending October 31:

 • New Listings increased 1.9% to 1,096
 • Pending Sales increased 0.6% to 933
 • Inventory decreased 16.2% to 15,440

For the month of October:

 • Median Sales Price increased 4.9% to $218,000
 • Days on Market decreased 2.8% to 70
 • Percent of Original List Price Received increased 1.1% to 96.2%
 • Months Supply of Inventory decreased 25.6% to 3.2

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: November 2, 2015

Data analysis from September national numbers revealed that new home sales under-performed slightly from what was originally expected. Some say this indicates market cooling, but with October giving way to November, it means we will soon have another month of sales to prove or disprove naysayers.

In the Twin Cities region, for the week ending October 24:

 • New Listings decreased 2.5% to 1,233
 • Pending Sales increased 10.7% to 934
 • Inventory decreased 15.7% to 15,650

For the month of September:

 • Median Sales Price increased 8.1% to $221,650
 • Days on Market decreased 8.5% to 65
 • Percent of Original List Price Received increased 1.0% to 96.6%
 • Months Supply of Inventory decreased 23.9% to 3.5

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: October 26, 2015

Jobless claims have dropped once again, matching levels not seen since 1973. Housing sales have continued to perform well, which should not be a surprise to those active in the real estate industry. Good economic environments foster healthy housing, and persistent health should lead to a Federal Reserve rate hike before the year is over.

In the Twin Cities region, for the week ending October 17:

 • New Listings decreased 0.2% to 1,301
 • Pending Sales increased 9.8% to 1,001
 • Inventory decreased 15.3% to 15,895

For the month of September:

 • Median Sales Price increased 8.3% to $222,000
 • Days on Market decreased 8.5% to 65
 • Percent of Original List Price Received increased 1.0% to 96.6%
 • Months Supply of Inventory decreased 26.1% to 3.4

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: October 19, 2015

Supply and demand drive housing prices, and this basic economic tenet has been in the spotlight recently, as inventory remains low across the country while prices continue to edge up in many locales. Cash investment has gobbled up supply in some regions, while a lack of new construction has hit the supply side in others. The truth remains that there is still healthy demand in most corners. Every market and situation is unique, so let's track the listings and sales for the week in your area.

In the Twin Cities region, for the week ending October 10:

 • New Listings increased 2.5% to 1,453
 • Pending Sales increased 13.0% to 1,053
 • Inventory decreased 14.7% to 16,048

For the month of September:

 • Median Sales Price increased 8.3% to $222,000
 • Days on Market decreased 8.5% to 65
 • Percent of Original List Price Received increased 1.0% to 96.6%
 • Months Supply of Inventory decreased 26.1% to 3.4

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: October 12, 2015

The Twin Cities region has now experienced 43 consecutive months of year-over-year price gains. Sales volumes are chugging along at a 10-year record pace. There is evidence that first-time home buyer demand and new construction levels have both improved lately. As the summer humidity gives way to fall colors and early morning frost, expect activity levels to ease when compared to the summer months while year-over-year improvements should continue.

In the Twin Cities region, for the week ending October 3:

 • New Listings decreased 7.2% to 1,371
 • Pending Sales increased 1.7% to 1,077
 • Inventory decreased 15.1% to 16,390

For the month of September:

 • Median Sales Price increased 8.3% to $222,000
 • Days on Market decreased 8.5% to 65
 • Percent of Original List Price Received increased 1.0% to 96.6%
 • Months Supply of Inventory decreased 26.1% to 3.4

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: October 5, 2015

The national economy continues to show reason for optimism, and the residential real estate market has taken the cue to react positively. As mortgage rates hover along the lowest marks seen in decades and affordability remains relatively high, more people would seemingly have an opportunity to buy a home. Sales figures have been showing that buyers are still active, but inventory figures are starting to show that sellers are, as a unit, lagging and possibly waiting until next spring to get into the action.

In the Twin Cities region, for the week ending September 26:

 • New Listings decreased 2.7% to 1,390
 • Pending Sales increased 9.0% to 1,021
 • Inventory decreased 14.6% to 16,529

For the month of August:

 • Median Sales Price increased 2.7% to $224,900
 • Days on Market decreased 5.9% to 64
 • Percent of Original List Price Received increased 0.8% to 97.1%
 • Months Supply of Inventory decreased 21.7% to 3.6

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: September 28, 2015

All roads continue to point to normal as fall is upon us. Nary a warning bell has sounded about anything beyond the typical seasonal drop-off. From the mouths of market-analyzing pundits, we are in the midst of one of the best housing markets in the last 15 years. This, of course, makes for a great autumn, along with pumpkin spiced lattes and cinnamon apple spiced tea, of course.

In the Twin Cities region, for the week ending September 19:

 • New Listings decreased 0.4% to 1,613
 • Pending Sales increased 18.0% to 1,090
 • Inventory decreased 13.8% to 16,606

For the month of August:

 • Median Sales Price increased 2.7% to $224,900
 • Days on Market decreased 5.9% to 64
 • Percent of Original List Price Received increased 0.8% to 97.1%
 • Months Supply of Inventory decreased 21.7% to 3.6

Source:  Minneapolis Area Association of Realtors

Weekly Market Update: September 21, 2015

Year-over-year home value percentages have continued to rise across the nation. Millennials have been pinpointed as the driver of the price increases, as this age group continues to show a willingness to ditch high rental costs while taking a step toward a commitment to homeownership at prices that may surpass last year at this time.

In the Twin Cities region, for the week ending September 5:

 • New Listings decreased 12.7% to 1,443
 • Pending Sales increased 31.9% to 1,167
 • Inventory decreased 12.6% to 16,537

For the month of August:

 • Median Sales Price increased 2.7% to $224,900
 • Days on Market decreased 5.9% to 64
 • Percent of Original List Price Received increased 0.8% to 97.1%
 • Months Supply of Inventory decreased 21.7% to 3.6

Source:  Minneapolis Area Association of Realtors