Pending home sales are rising, and interest rates have hit a one-year low, offering hope to Minnesotans looking to buy a home.
The National Association of Realtors reported a 3% increase in pending home sales in December compared to November and the previous December. “Homebuyer momentum is building,” according to the report released last week.
Local realtors said the trend indicates a more balanced market, creating optimism for first-time buyers like Lucy Pabst and Mark Strayer.
“Yeah, it did feel like, is this gonna be impossible?” said Pabst.
Pabst and Strayer began the official search for their first home about a month ago as the average 30-year fixed-rate mortgage hit a one-year low in December.
The couple secured a 6.25% interest rate, which Pabst noted is lower than the 8-9% rates their friends faced a few years ago.
“We’re, I think, very happy with that,” said Pabst.
Twin Cities realtor Amanda Cox Zuppan has observed more home listings, which she said is unusual for December in Minnesota.
“Historically in real estate, December in Minnesota is just a really slow time of year… So that is a little unusual,” said Cox Zuppan.
She explained that more homes on the market give buyers leverage, allowing them to negotiate prices and terms more effectively.
“We’re starting to see buyers getting a little bit more leverage,” said Cox Zuppan.
“So being able to purchase with less multiple offers, not having to put 20, 30, $40,000 over asking to get the house, and actually being able to negotiate a little bit with price, but also with inspection, repairs, things like that,” said Cox Zuppan.
Cox Zuppan said it’s a signal that the market is shifting towards a better balance for buyers.
“We’ve had such a strong seller’s market for the past five years… And I’m really excited for the upcoming year, and just seeing the playing field leveling out a little bit,” she said.
Pabst and Strayer acknowledge the shift, although they haven’t seen as many options as they’d hoped. However, they said the homes for sale seem to be staying on the market longer lately.
“In terms of, you know, us having time to kind of like, sit and think about a property instead of having to decide, like, right now if we want to make an offer,” said Strayer.
“Definitely, yeah, more power, more flexibility… the power to kind of negotiate.”
Cox Zuppan expressed hope for continued declines in interest rates in the year ahead, though she said predicting the future is difficult.
“I really hope that we see the rates come down a little bit,” said Cox Zuppan. “I think if we get to that, you know, mid-five range, I think that’s a really good place to sit.”
As of this report, the 30-year fixed mortgage rate was about 6.2%.
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