Demand for Homes Continues to Increase, Tightening Market Inventory
“Recent showing activity shows that prospective home buyers shifted their interests to more expensive homes,” said Todd Walker, President of Minneapolis Area REALTORS®. “Two years ago, listings priced under $200,000 saw the largest share of showing activity. This year listings around $250,000 have seen the greatest share of activity.”
Pending & Closed Stats
Pending Sales increased 13.2 percent from May 2020 to 6,689 for the month. Closed Sales increased 3.3 percent from May 2020 to 4,963 for the month. Buyers are out in force, and so sales are up despite an affordability crunch.
Overall showing activity from last week has been trending upwards but was down 4.3 percent compared to mid-June of 2019. Listings priced below $300K saw decreased interest within this timeframe, while listings between $500-800K grew most in showing activity, up 66.0 percent.
U.S. median rental prices increased 5.5% year over year for an average of $1,527 in May, exceeding pre-pandemic figures and putting rents at their highest level in two years, according to realtor.com’s Monthly Rental Report.
Other Factors Impacting Residential Real Estate
After months of record highs, lumber prices have finally begun falling, with futures for July delivery down 41% since May’s record high, their biggest ever weekly loss, Bloomberg reports. Still, demand for housing remains strong as ever, with mortgage and refinance applications up from the previous week, according to the Mortgage Bankers Association.
Real estate brokers and analysts who pay close attention to market fundamentals say the answer is no. And a housing shortage is the lead reason. Century Link 21 Principal & Owner, Thomas Sbarra, shares: "While the buying frenzy is like the early 2000s, I think it will be two or three more years before there’s a correction, and the market could just level off.”
Thinking of buying, selling, investing or renting?
Let us know, we would love to help! Reach out to Angie or Kent.
Sources: Minneapolis Association of Realtors, Real Trends