(KNSI) – The Central Minnesota real estate market is softening in the face of a relentless push higher in mortgage rates. For the first time since 2008, Freddie Mac says the cost to finance a home purchase is over 6 percent.
St. Cloud Area Association of Realtors President Kelly Schepers explains the trends.
“Our new listings are down. Our homes for sale, that number continues to grow slightly. Our ‘months of supply’ is continuing to move up a little bit as well.”
She says the effects show up in lower listing prices and a reduction in the percentage of the listing price a home eventually sells for.
“Our percentage of original price received has actually declined slightly. Instead of getting 101% of the sale price like we got last year, this August we saw 99.9%. We’re real close to 100% yet and year to date average we’re still at 100%.”
The real estate market tends to quiet down in the fall and winter because parents don’t like to move their families mid-school year. That will continue to put pressure on prices in the short term. Zillow says nationwide, the average home price fell 0.3% in August. That’s the largest percentage drop since 2011.
Schepers says a lot of potential buyers are lurking on the sidelines but high mortgage rates have affected affordability. Schepers says demand will hold up better for lower-end housing options than luxury real estate.
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