April 2024 Home Sales – Minnesota

This just in from Minnesota Realtors. April 2024 definitely outperformed April 2023.

April home sales infographic
Screen print – Home sales infographic

“The Minnesota housing market, along with the weather, is heating up. Seller activity increased, and buyers were also more active compared to April of 2023. Home prices and inventory both rose, but affordability issues persisted due to supply and demand imbalance.

Our April affordability index shows that the majority of buyers with median incomes don’t make enough to afford median priced homes. To that end, more supply is still needed across the price spectrum, especially in ranges first-time buyers can afford.

“Even as inventory levels rise, sellers are still finding they have the upper hand in most areas and price points,” said Geri Theis, President of Minnesota Realtors®. “Buyers should understand that while they have more options, there is still competition. That’ll be even more true if rates fall.”

April Year-Over-Year Summary of Key Market Indicators:
• Closed sales: 5,465 (up 17.9%)
• Median sales price: $350,000 (up 4.5%)
• Average sales price: $405,208 (up 4.6%)
• New listings: 9,042 (up 20.3%)
• Pending sales: 6,283 (up 7.7%)
• Days on the market: 42 (no change)
• Homes for sale: 12,408 (up 18.2%)”

[April Housing Market Report]

April 2024 Home Sales in St. Paul

Here are some numbers by neighborhood for home sales in St. Paul Minnesota.  Sales are up from last month but it sure isn’t like the old days, that long ago time when there were three times as many houses on the market in April and twice as many sales. Interest rates are high and so are home prices. When rates go down more people might be interested in moving which means prices will go up more.

The imbalance between supply (low) and demand (high) will resolve but not this year. Buyers should expect to pay more than the asking price for a house this spring and will see some of the highest mortgage interest rates in decades. Sellers can expect a quick sale but cash sales are down slightly from last year.

The data used to make the table below was extracted from the NorthstarMLS (Multiple Listing Service – a database) which is deemed reliable but not guaranteed. These are single-family homes in St. Paul, including condos and townhouses but excluding rental properties.

Table showing April 2024 Home sales
Home sales in St. Paul April 2024

For more local real estate data please see Local Market Conditions & Home Prices

If rates are too high swipe left

brick and brownstone turret
Turret with brick, brownstone, and granite.

Mortgage interest rates are too high and so are home prices, which rose due to high demand and low rates.  Some real estate professionals are advising their clients to buy a house even though rates are 7%ish.

“Marry the house, and date the rate”.  This catchy phrase has become popular advice and a catchy phrase since the Spring of 2022 when mortgage rates increased to 20-year highs.

The phrase “Marry the house, and date the rate” means you’re committing to a long-term relationship with the house you love.  But you can dump the interest rate when you refinance.

Not so fast. Rates will remain high for a few years and it will take a few years just to build some equity at today’s prices. In fact, you can’t really date a rate. Well maybe you can but you don’t get to just decide when to date another rate.

When a borrower refinances to a new rate they start all over making mostly interest payments. People who have been laid off generally can not refinance. There are fees and closing costs too. In most cases, a borrower would need to own the house for at least three years and rates would have to go down by 2%. Good luck with that.

When my husband and I bought our first house rates were over 8.5%. At the same time houses were less expensive back then and our monthly payments were just a little more than rent.

We can not assume that home values will always rise and that rates will go down soon.  Housing prices can go down or stay flat and rates can go up.  In fact, sometimes renting makes more sense than buying. A home buyer could date an apartment and eventually marry the right house at the right price.

Typically the real estate agents promoting this phrase “Marry the house, and date the rate” either don’t know any better or are a bit sketchy.

Instead of dating the rate, swipe left.

 

Home prices by neighborhood

Here are some numbers for home sales in St. Paul, Minnesota for the month ending February 29. The high demand and low supply kept home prices up. Most of the city is experiencing a strong seller’s market. Downtown St. Paul is experiencing a weak seller’s market.

Overall the average days on the market is 41 days. Interest rates went up in February and mortgage applications went down. Experts are predicting lower interest rates during the second half of the year with home sales rising in 2025.

Home sales by St. Paul neighborhood
Home sales by St. Paul neighborhood

The numbers used in the chart were extracted from the NorthstarMLS which is deemed reliable but not guaranteed. Other sources of this information include areas outside of the city of St. Paul, the information presented here is inside the city limits and does not include suburbs.

 

Another low inventory spring market

The trend is down for the number of houses on the market in March. It isn’t just about higher interest rates, but nterest rates are making it worse. It is also about fewer reasons to move.  Fewer people are moving because of a new job. Demographics are another reason for staying put. Older people do not move as often as younger people do. Add a shortage of housing to the mix and we have yet another reason why people don’t move.

The chart shows the number of houses on the market each month in St. Paul over the last decade.  The peaks each year occur in the spring, and the valleys happen during the holidays at the end of the year.  I’ll have some numbers for February 2024 home sales on Wednesday, March 6.

Number of houses for sale – data from the Northstar MLS