Twin Cities Real Estate Market Update for May 2024

More Homes for Sale in April and Home Prices Edge Up

It’s mid May already. This year is flying by. The lilacs are in bloom, and so is the housing market. The number of new home listings jumped up in April, home sales grew too, and prices continued to rise.

The number of new homes listed for sale in the 7-county Twin Cities metro jumped 19 percent from April to May.

We saw about 9,000 homes come on the market last month. The number of new homes listed for sale was also up 22 percent over the previous April. So the spring market is definitely opening up.

That increase showed up to varying degrees in all home types, single family homes, townhomes and condominiums.

It is also showed up to varying degree in all price points. In April, the number of new listings priced under $300,000 grew by 10 percent compared to the same month last year. And that is an area where we really need to see some growth.

In the $300,000-$500,000 price range, new listings were up 22 percent. In the $500,000-$800,000 price range saw an even bigger jump, 24 percent.

The biggest growth came in the $800,000 plus luxury market where listings jumped almost 55 percent. Much of the growth in the luxury is driven by new construction.

Overall, it seems like home sellers and home builders are feeling a lot  more optimistic this year than last year.

Buyers Have More Choice as Total Number of Homes for Sale Grows

The total number of homes for sale also grew in April, but at a more modest pace, up about 16 percent from April 2023. And up about 5.3 percent from March of this year.

Looking just at previously- owned homes, though, I see an even bigger jump. The total number of previously owned homes for sale in April was up by 27 percent year over year, and up by 11 percent since March.

Interesting to note, though, the total number of new construction homes listed for sale actually fell 4.2 percent compared with last April, and also dropped off a bit since March.  

In April, we had about a two-month supply of homes for sale. That is still considered a sellers market.

Graphic showing the Twin Cities housing market still favors sellers

In April, we had about a two-month supply of homes for sale. That is still considered a sellers market. 

Pending sales rose, too, in April by 9 percent year-over-year and about 5.8 percent from March. 

That shows me that buyers are out there, but we also saw interest rates jump back up over 7 percent in April, which can have a cooling effect on buyers.

Just looking at the numbers, it seems both home buyers and home sellers are slowly getting a little more realistic that mortgage interest rates in the 6-8 percent range are here to stay for a while.

Sellers Still Have the Advantage

Even with some increase in the number of new listings and growth in the total number of homes for sale, this is still a strong sellers market.

Home sellers across the metro were getting 100 percent of their asking price, on average. And homes were selling quickly. The median number of days to sale dropped to 17 in April.  Pretty typical for this time of year.

Single family homes are selling even a little more quickly. The condo market is moving more slowly. The median number of days to sale for condos was up around 36. Just a reminder, median mean half the sales took longer than that and half sold more quickly.

Home Prices Continue to Rise

Home prices have continued to rise slowly since the beginning of the year.

The median sale price in the Twin Cities in April was $375,000, up 2.2 percent from a year ago.  

The average sale price also rose year over year, from $436,000 to $447,333, an increase of about 2.6 percent.

Graphic showing the increase in Twin Cities home prices in April 2024

Interest Rates Stubbornly High

Interest rates on a 30 fixed-rate mortgage had actually dropped a bit earlier this year, but crept up again in April and stayed above 7 percent throughout the month.

After saying last year that they might cut interest rates several times this year, the Federal Reserve has now backed away from that idea and are instead saying there may not lower the benchmark interest rate at all this year if they don’t see the improvement they’re looking for in terms of curbing inflation.

So if you’re thinking about buying or selling a home and waiting for mortgage interest rates to drop, you may be waiting well into next year. In the meantime, home prices are creeping up.

If you’re wondering how these market trends may affect your plans to buy or sell a home, reach out. I can put together a customized market report just for you.

J Trout Lowen is a Minneapolis REALTOR® helping home buyers and home sellers navigate the Twin Cities real estate market.

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