Twin Cities Housing Market: September - 2020
At $315,000, yet another record for the Twin Cities’ median home price was set in August as COVID-19’s impact on the home inventory level combined with record low mortgage rates continued to put upward pressure on prices.
With city dwellers looking to get further out with more space, the markets in Downtown Minneapolis and in the Minneapolis Lakes areas have been taking a hit (especially the upper bracket segments) while new construction and higher end suburb markets have received a corresponding boost.
Mortgage Rates: Mortgage rates in the U.S. continued to fall into record low territory through August and September and currently sit at 2.87% for the average 30-year fixed mortgage, which is a new record low.
Home Builder Confidence: The NAHB housing market index in the US jumped 5 points to 83 in September of 2020, beating market forecasts of 78. It is the highest reading on record as record-low mortgage rates continue to boost demand for new homes and many people move away from the big cities due to the coronavirus pandemic.
Closed Sales: 6,790 transactions closed in the Twin Cities in August. That is down 3%, month over month and up 1%, year over year.
The Median Home Price: The median price moved up to a new record high of $315,000 in August which is up 1%, month over month and 10%, year over year.
New Listings: 7,889 new listings hit the market in August. That is down 2%, month over month, and up 2%, year over year.
Homes for Sale: Despite the strong listing volume, the home inventory level continued to decline in August as the month ended with only 8,963 active listings. That is down 9%, month over month, down 32% year over year and down a whopping 50% from 5 years ago.
Pending Sales: 7,217 homes, condos and townhouses came under contract in August. That is up 3%, month over month and up 20%, year over year as the spring market continued to be pushed into the summer.
Mortgage Delinquency in the U.S.: Early-stage delinquencies improved further in August, while seriously past-due loans increased; rate of improvement slowed. (Source)
- The divergence between early-stage delinquencies and seriously past-due mortgages continues to widen as fewer delinquent loans cured to current status in August
- Overall, the national delinquency rate fell just 0.03 basis points from July after declining a combined 0.85 basis points over the prior two months, a noticeable slowing in the rate of improvement
- The share of borrowers with a single missed payment had already fallen below pre-pandemic levels; in August, the sum of all early-stage delinquencies (those 30 and 60 days past due) fell 9%, dropping below that benchmark as well
- However, the improvement in early-stage delinquencies was offset by a 5% increase in serious delinquencies – those 90 or more days past due – which have now risen in each of the past five months
- August’s rise in serious delinquencies was the mildest of those five months, suggesting that they may be nearing their peak
- While there are nearly 2 million more seriously delinquent homeowners than at pre-pandemic levels, foreclosure activity remains muted due to active forbearance plans and foreclosure moratoriums
By Nick Leyendecker, Founder | Broker | REALTOR®