More listings — and slightly higher prices — for Twin Cities home buyers this summer

It’s been a status-quo summer for home sales in the Twin Cities with sales easing — as they always do — after a robust spring, according to a midyear sales report released Tuesday.

There were 4,469 pending sales last month across the 16-county metro, 10.8% fewer than last year at this time, according to Minneapolis Area Realtors (MAR). Despite that decline, pending sales so far this year are up 1.8% over 2023.

Many would-be sellers were on the sidelines last month when there were 6,358 new property listings, 5.8% fewer than last year. New listings so far this year are up 10.6% over last year, causing a double-digit increase in the number of available houses.

Despite the June retreat, sellers are still firmly in the driver’s seat. At the current sales pace, there were enough listings on the market to last 2.4 months. The market is considered evenly balanced between buyers and sellers when there’s a four- to six-month supply of houses for sale.

“There are still supply constraints in a lot of areas,” said Kris Lindahl of Kris Lindahl Real Estate, which has offices across the metro.

Lindahl said while his agents are reporting multiple offers on listings in some parts of the metro, stiff competition is less prevalent than it has been, meaning fewer buyers are waiving finance and inspection contingencies.

“There are lot of people who don’t want to take the risk because the market is turning,” he said.

With more listings to choose from and a bit less froth, price gains in the Twin Cities have been slow and steady. In June they posted a meager gain, rising 1.8% over last year to $390,000 as home buying dipped slightly, according to a monthly MAR report. Earlier price gains this year have been in the 3% to 4% range.

Prices leveled out last year at this time but have since posted annual gains every month. While price cuts are more common and houses are taking longer to sell, sellers still got 100% of their original asking price, in contrast with last fall and spring when discounts were common.

Similar trends are playing out statewide. During the first six months of the year, new listings were up almost 9% — more than twice the rate of sales, according to a report from Minnesota Realtors. Listing inventory has increased for 11 consecutive months, but there’s still pent-up demand in many parts of the state and on average properties are selling in 33 days, which is one day faster than the typical market time in the metro. Statewide, the median sale price by the end of June was $355,000, a 1.4% increase over last year.

Home prices have been stifled by mortgage rates hovering around 7%. Historically, rates have only returned to the long-term average, but coupled with record home prices, they’re making it difficult for buyers to pay as much as they did when rates were much lower.

Mortgage rates have slipped a bit. The average 30-year fixed-rate mortgage was 6.89%, according to the latest weekly survey by Freddie Mac. That was down slightly from the previous week and on par with the same time last year.

Those increases are reflected in the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index, which tracks repeat sales of the same property and offers a slightly different view of price trends than the MAR data, which tracks sales during a particular time frame.

Mortgage rates leapt above 7% in April, tempering prices, which increased only 1.4% from March to April. Compared with last year, April prices were up just 2.9%. That’s about half the national average and lower than typical for the Twin Cities, which tends to closely track the national average.

“This is still a somewhat fragmented market where activity truly varies from price point to price point and area to area,” said Jamar Hardy, Minneapolis Area Realtors president, in a statement. “While we’re encouraged by more supply, the lack of affordability caused by higher mortgage rates and rising prices are still significant hurdles.”