As we enter the fourth quarter of 2022, the market is notably different than it was at the beginning of the year. Inventory concerns & rapidly rising home prices were the talking points earlier this year as the market has seen record-low interest rates. This drove many buyers out of the market as they were either outbid in a multiple offer situation or simply couldn’t make sense of the home's quality for the available funds.
As mortgage rates have leveled out over the past couple of months, we’re starting to see a more balanced buyer/seller market compared to the pure seller market in early 2022. Nationally, the pending home sales slid 1% month over month from June to July. This means that inventory is starting to tick up as more homes are put on the market & the number of buyers searching has slightly decreased.
Real Estate Buyers' Insights
For many first-time homebuyers, this could be the opportunity to be more selective of the features without having to break the bank. The thing to keep in mind is that high mortgage rates can always be refinanced down the road, especially if you make updates to the home & build equity. As supply chain issues for new construction have slowly begun to fade away, additional homes are starting to become available. In fact, the number of homes on the market has been leveling off & begun to increase compared to the number of homes being sold (1.3% YOY increase in total inventory). If the pandemic hindered your ability to buy a home, whether financially or available selection, the fourth quarter may be the opportunity for you to get back in the market.
Real Estate Sellers' Insights
From a seller’s perspective, the current market conditions are still favorable for listing. Despite the increases in average home prices slowing down, the listing prices are still at an all-time high. The higher interest rates ultimately lead to only serious home buyers searching for their perfect home. This provides peace of mind for sellers as they are more likely to see fully qualified buyers rather than window shoppers. Demand is definitely still there as millions of millennials are looking to make their first purchase, many of which were forced to hold off during the pandemic.
For a full understanding of the Real Estate Market as a Seller, check out this article by Realtor.com: 2022 Housing Markets Remain in Sellers Favor, but Conditions Are Changing.
Rental Market Conditions
While the rental market saw increases in the median lease prices through the first half of 2022, these costs have recently flattened out. Despite June & July reaching yet another new high for the national average, Q3 showed these increases slowing significantly despite a resurgence of big-city living. As many people have gone back to in-person for work, the market has seen many renters moving back into the metro areas to be closer to their job. It’s safe to say that many of these renters moving back to the city mostly consist of millennials who are expected to become first-time homebuyers in the next year or so.
For more information on the Rental Market, visit Realtor.com.
Expected Mortgage Rate Increases
Starting in June, we began to see the FED rate begin to increase to combat exponentially increasing inflation. While the FED rate does not completely dictate mortgage rates, it does have a significant impact. The first time we saw a 75-point FED rate increase, we subsequently saw a roughly 1% increase in mortgage rates. Fast forward to the end of Q3, the Real Estate market currently has a national average of 6.02% on a 30-year fixed-rate mortgage (over a 3.5% increase since Q1). While many experts are predicting that we are nearing the top of the increases, it’s also being predicted that the FED may increase its rate one more time before the end of the year. Buyers on the fence about purchasing a home may want to consider doing so before the end of the year but we recommend speaking with a Real Estate Agent & Mortgage Officer prior to diving in. View the full article on Realtor.com.
Current Market Insights for the Twin Cities in Minnesota
While we discussed national averages so far in this article, it’s important to note that every market is different in terms of the average mortgage rates, inventory, buyers & sellers in the market, & even current rental conditions. Currently in the Twin Cities Minnesota market, we have _____ homes for sale with an average listing price of $____. As for local mortgage rate insights, they are changing daily so you’ll want to speak to a loan provider to get an accurate assessment of the financial components of buying a home.
For additional insights on the current conditions in St. Paul & Minneapolis, you can view the chart below or contact Grimm Realty Group for a complimentary consultation. Doug Grimm & his staff are eager to help buyers & sellers navigate the ever-changing Real Estate Market. With the mountains of information out there, having an expert by your side can help you navigate the process & weed out the incorrect or misleading info. Give us a call today!
Have a question about your home buying or selling options or the Real Estate market in general? You can schedule a Zoom Meeting with Grimm Realty Group to discuss your housing needs, lifestyles, & future goals!
For more information on the Twin Cities Real Estate Market,
visit the Realtor Associations in our area:
https://www.mplsrealtor.com/ - Minneapolis Area Realtors
https://spaar.com/ - Saint Paul Area Association of Realtors
https://www.mnrealtor.com/home - Minnesota Realtors
Sources:
Realtor.com: Pending Home Sales Slide 1% MoM as Buyers Reach Financial Limits
Realtor.com: August 2022 Monthly Housing Market Trends Report
Realtor.com: 2022 Housing Markets Remain in Sellers Favor, but Conditions are Changing
Realtor.com: July Rental Report: Nationwide Rent Holds Steady Despite Big-City Resurgence
Realtor.com: Freddie Mac - Mortgage Rates Pass 6% for the First Time Since 2008
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The content on this page provides general consumer information. It is not legal advice or regulatory guidance. Grimm & Associates may update this information periodically.
Grimm & Associates may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. All statistics & information are subject to change with market conditions.
Grimm & Associates is a MN-licensed real estate Broker and does not represent you as your agent unless a representation agreement is mutually signed.