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Twin Cities home prices rise, even as sales plummet by more than a third

Median home prices in the Twin Cities continue to climb, even as pending sales plummet by more than a third, the largest year-over-year decline since the recessionary climate of 2010.

In a written statement, two leading Twin Cities Realtor associations said that interest rates, hiked by the Federal Reserve to the highest point in 20 years, are having the intended effect of cooling borrowing in an attempt to slow inflation.

Still, the median sales price of a Twin Cities home rose 4.7 percent to $356,000, even as 30-year mortgage rates average around 7 percent, the highest interest rates since 2002. That’s the smallest increase in sales price since the onset of the pandemic.

According to new data from the Minneapolis Area Realtors and the St. Paul Area Association of Realtors, pending sales fell 37.7 percent, year-over-year, and transactions closed down 33.5 percent.

Home sales in Minneapolis and St. Paul decreased 30 and 33 percent, respectively.

“Although the rate of price growth is slowing, prices continue rising as both the homes and buyers in the market skew toward higher price points,” reads a joint statement from the St. Paul and Minneapolis associations, released Tuesday. “Inventory levels remain tight despite the recent shifts toward a more balanced market. The softening in demand has been met with a similar decline in new listings, keeping the balance relatively tight.”