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Minnesota state and Twin Cities metro Realtor associations report more homes were listed last month at lower rates but fewer sales were made compared to October 2024.
Pending sales fell both in the metro and statewide during the same timeframe. Those results come even though the realtor group reports mortgage rates touched their lowest level in a year last month.
The groups attribute the softer demand to several factors including a weakening labor market and rising inflation.
Patti Jo Fitzpatrick is the president of Minnesota Realtors. She said consumer confidence may also have been shaken due to the government shutdown.
“Buyers are maybe holding off a little bit, you know, thinking about interest rates,” she said. “Maybe they're coming down a bit, but still, affordability is still a thing, so I think we're running into some buyers just kind of pumping the brakes."
Nationally, the median age of first-time home buyers increased substantially from the late 20s to 40. But a Realtor.com analysis finds that Minnesota is the only state where over half of the homeownership rates are made up of Gen Z and younger millennials.
“That likely reflects home prices below the national average and incomes above the national average here in Minnesota,” Fitzpatrick said. “Even though we’ve seen our share of affordability challenges, buyers remain resilient and we’re proud to have a more affordable housing stock compared to other parts of the country.”
The median sales price in the metro last month climbed to about $390,000, 2 percent higher than a year earlier. The price increase statewide was smaller.
Fitzpatrick said the White House's proposal to introduce a 50-year mortgage plan could potentially bring more home buyers to the table. And a longer term loan might equal lower monthly payments, but it would dramatically increase the cost of the loan over time.
“It could be a good thing for the short term, but I think buyers aren't going to stick with it,” she said. “They'll either sell or refinance.”
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