The chart uses data from the NorthstarMLS and represents previously owned single-family homes sold in the Twin Cities metro area during the last five years. We can see the jump in home sales in 2021 and 2022. I have seen this before, when many people moved and then home sales slumped for a few years because generally, people do not move all that often.
In this case, mortgage interest rates were much lower when the home buying was happening. People are staying put. Home sales remain low because people are not putting their homes on the market. With all of the chaos and uncertainty created by trade wars and tariffs, I believe home sales will remain low in 2025. When we go into a recession, interest rates may come down but I don’t think that is going to be enough of an incentive for people to want to buy or sell residential real estate.
