Mortgage Rates: In September, the average rate for a 30-year fixed conventional mortgage rose from 4.5% to 4.7%. So far in October, that volatility has continued and those rates spiked last week to a 7 year high of 4.9%. That is up 25%, so an entire percentage point year over year. To put that in perspective, the last time mortgage rates were this high was back in April of 2011. So long as the Federal Reserve remains committed to shrinking their position of U.S. Treasury bonds while the Treasury is simultaneously auctioning bonds to finance U.S. deficit spending, we can expect the upward pressure on long term interest rates to continue.
Closed Sales: The Twin Cities had 5,136 residential closings in September. That is down 23% month over month, down 5% year over year and up 6% from 5 years ago.
New Listings: 6,859 new residential listings hit the market last month which is down 12% month over month, up 6% year over year and up 6% from 5 years ago.
Homes for Sale: The home inventory level continued to climb in September as we ended the month with 12,720 active listings. That is up 2% month over month, flat year over year and down 27% from 5 years ago. Once again, this is the first time that the home inventory level has risen in the month of September since September of 2013 which is an interesting trend deviation.
The Median Home Price: The median home price fell to $262,000 in September. That is down more than 2% month over month but still up 6% year over year and up 34% from 5 years ago.
Pending Sales: Pending sales, a leading indicator for future closings and have been predictably in decline since May due to the seasonal downturn in market activity. In September, 4,786 residential units came under contract which is down 16% month over month, down 1% year over year and up 13% from 5 years ago.
This concludes my insight for October. Please don’t hesitate to connect with me any time to discuss the market conditions in your particular neighborhood and I thank you for taking the time to watch this video.
By Nick Leyendecker, Founder, Co-CEO and REALTOR®