There was a lot of news about the housing market over the weekend. Most of it didn’t make sense. Does it matter if home sales were up or down from last June? Yes and no. Home sales are usually higher in June than in July here in the Twin Cities.
I decided to look at more data in an effort to go beyond the headline which are kind of gloomy. The chart below represents home sales in the Twin Cities over the last decade. It doesn’t look like home sales are down but higher significantly higher than they were any year before 2020 which was a strange and unusual year with the pandemic lockdowns and civil unrest.
Charts made with data from the Northstar MLS which is deemed reliable but not guaranteed. Houses listed on the MLS account for most of the home sales in the Twin Cities. The chart that shows supply also explains why home prices are going up not down. It is true that we are reaching a point where housing prices may not be sustainable. When they get too high corporations will buy up more of them and we will all be paying rent to our corporate overlords.
For now, the higher interest rates will slow the housing market down a bit. The housing market is always impacted by interest rates and by the economy. For right now I think it is especially important to look at more than a months worth of data. There is value in comparing home sales month to month or year over year but the numbers don’t tell the whole story.
