Twin Cities Housing Market: August - 2020
For the first time in recorded history, the median home price in the Twin Cities for closed sales in the month of July moved up (rather than the typical decline) as COVID-19’s impact on the home inventory level combined with record low mortgage rates continued to put upward pressure on prices. It was not a marginal increase either, but rather a sharp, 3% rise to a new record high of $313,000.
Mortgage Delinquency in the U.S.: Overall mortgage delinquency numbers have been improving, but the delinquency rate for homeowners who are seriously behind in their payments is soaring, another indication of a branched housing market.
The number of borrowers delinquent on their mortgages fell by 340,000 in July, a 9 percent drop from June, according to data released by Black Knight, a mortgage data and technology company. (Black Knight counts all homeowners who are delinquent, regardless of whether they are in a forbearance plan.)
However, the number of homeowners who were at least 90 days behind on their payments grew by 376,000 last month, a 20 percent increase from June. Serious delinquencies are now 1.8 million higher than pre-pandemic levels and are at their highest level since early 2010.
Mortgage Rates: Mortgage rates in the U.S. continued to fall in to record low territory in July and August and currently sit at 2.91% for the average 30-year fixed mortgage, which is just above the record low of 2.88% set back on August 6th.
Home Builder Confidence: The NAHB housing market index in the US rose 6 points from the previous month to 78 in August 2020, beating market expectation of 73. It was the highest reading since December 1998, as sentiment rebounded following the easing of coronavirus lockdown restrictions and as record-low mortgage rates boosted demand for new homes.
Closed Sales: 7,018 transactions closed in the Twin Cities in July setting a record for volume closed during the month of July as COVID-19 dragged the spring housing market into the summer months. That is up 12% month over month and up 4% year over year.
The Median Home Price: For the first time in recorded history, the median home price in the Twin Cities for closed sales in the month of July moved up (rather than the typical decline) as COVID-19’s impact on the home inventory level combined with record low mortgage rates continued to put upward pressure on prices. The median price moved up to a new record high of $313,000 which is up 3%, month over month and 11%, year over year.
New Listings: COVID-19 lockdown’s affect on new listings began to ease in July as 7,988 new listings hit the market. That is up 6%, month over month and up 1%, year over year.
Homes for Sale: Despite the strong new listing volume, the home inventory level continued to decline in July as the month ended with 9,494 active listings. That is down 4% month over month, down 27% year over year and down a whopping 48% from 5 years ago.
Pending Sales: 6,898 homes, condos and townhouses came under contract in July. That is flat, month over month and up 11%, year over year.
This concludes my housing market insight for the month of August. Please don’t hesitate to connect with me if you would like to have a more in-depth discussion regarding the conditions in your specific market segment or neighborhood and I thank you for taking the time to read this blog.
By Nick Leyendecker, Founder | Broker | REALTOR®