Renting vs. Buying in the Post-Pandemic Twin Cities Minnesota Real Estate Market
Updated: Nov 1, 2022
There is no doubt we are still sifting through the aftermath of the pandemic. Going from a rather steady market to a heavy seller's market and buyers buying property substantially over the asking price. After experiencing the new interest rates, the rate at which homes sold slowed down and the renters market picked up those who fell through the buyer cracks for whatever reason. Now we are seeing that even the rate of renters has decreased for 1+ bedrooms.
September Rental Report
Seeing rental rates have slowed to a mere 7.8% (Y/Y), it makes sense that rental prices are starting to slowly make their way back down- down $22 dollars since July. This rate is the lowest growth rate seen in the last 16 months. However, it is still double the growth rate experienced just before the pandemic. It seems only 1+ bedrooms have been affected by this slight decrease for studios remain the same.
Visit Realtor.com’s September Rental Report for the full update.
Home Prices and Inventory are Shifting
Following past years, it is expected that Q4 will slow down as we reach the end of the year. It has been noted that for seven months in a row, home prices have decreased. With interest rates now sitting at a crushing 6%, it is not surprising that those with established rates at 3% and lower are hesitant to list their homes. It is expected that homes on the market will have a 10% price decrease to compensate for the interest rate.
Along with Q4 traditions, vacation properties are still going strong due to their limited inventory as the holiday months approach.
Fall & Winter Real Estate Pricing Predictions
As mentioned before, if Q4 follows previous years, we should expect to see that while there is a difficult decision to make on renting versus buying; buying trends to be a little easier in the fall. The reason for this is that people who were unable to sell their home during the summer just want to be able to move before winter hits and are therefore a little more open-minded to negotiations and concessions. With homes taking longer to sell, there has become a larger inventory and thus allowing for price adjustments.
While it may be daunting to buy a home right now, it is important to remember the rent is about half if not a little more than half of a mortgage rate right now. And while 6% is extremely high, an option that you don’t have with renting is to refinance. The only promise of renting is that you will be consistently charged more as time goes on.
If you’re curious to see if it makes more sense for you to rent vs. buy, visit Realtor.com’s Rent Or Buy Calculator.
Questions about the process of Buying Real Estate?
As the renting & buying market enter Q4 of 2022, we are starting to see some balance for rates, inventory, & the number of people in the market. Even though mortgage rates are higher than earlier in the year (which were historically low), there are a lot of opportunities for people who are looking to buy a home. There are plenty of first-time home buyer resources available & refinancing to a lower rate in the future could be a valuable option to consider. With rental pricing seeing a slight dip more recently, renting for the time being while you search for your perfect home is a temporary option to consider. For a more in-depth look at whether renting or buying is the best option for you yet this year, feel free to give us a call to chat about your specific needs & options that fit them!
Grimm Realty Group is located in the neighborhood of West Saint Paul, Minnesota where Doug has been a Real Estate Agent for over 20 years. We're here to help you through every step of the process & develop a strategy that is catered to your specific needs. Give us a call today or follow us for more insights on the Twin Cities & for regular updates on the Real Estate Market!
Call Grim Realty Group today or follow us for more insights on the Twin Cities & regular updates on the Real Estate Market!
Renting vs. Buying in the Post-Pandemic Real Estate Market Sources:
Realtor.com's September Rental Report
Bank Rate's 2022 Q4 Market Trends
Mortgage Reports: Should I Buy or Rent a Home in 2022
Realtor.com's Rent or Buy Calculator
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!
Questions about Your Home? Contact Us!
Grimm Realty Group Legal Disclaimer
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.