Mortgage Rates Exceed 7 Percent for the First Time this Year
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April 18, 2024
The 30-year fixed-rate mortgage surpassed 7 percent for the first time this year, jumping from 6.88 percent to 7.10 percent this week. As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year. Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future.
Information provided by Freddie Mac.
March Housing Market Report
- Signed purchase agreements rose 7.8%; new listings up 4.0%
- The median sales price increased 2.8% to $366,000
- Market times fell 6.9% to 54 days; inventory up 8.4% to 6,879
(Apr. 15, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both buyer and seller activity rose in March. Inventory levels and prices were also higher.
Sellers, Buyers and Housing Supply
With warmer temperatures comes heightened home buyer and seller activity. Metro-wide, we’ve now seen five consecutive year-over-year increases in new listings and four consecutive increases in pending sales. During the first quarter (YTD), seller activity rose 17.9% while pending sales were up 9.4%. That’s allowed inventory levels to also rise—most recently up 8.4% to 6,879 active listings. While buyers can expect to see more listings in their searches, most areas and sub-markets still favor sellers. There is a good amount of pent-up activity from buyers and sellers that’s been accumulating from when rates jumped. The backlog is starting to be released as more consider making a move. In some ways, residents of the Twin Cities are adjusting to the higher rate environment, but low supply and rising prices combined with higher rates have held back too many from homeownership—particularly first-time buyers without the equity from their first home. Move-up buyers and those looking at pricier segments are less rate-sensitive and so activity is rising more quickly higher up on the price spectrum.
Prices, Market Times and Negotiations
Perhaps surprisingly, REALTORS® still report multiple offer situations in some markets and price points. If rates were to ease further toward 6.0%, that will continue. Listings spent 6.9% fewer days on market compared to last March. And sellers accepted offers at 98.8% of their asking price, up 0.2% from last year. “It’s clear that people are ready and eager to get deals done,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “But even a few months of increases in available listings doesn’t mean the housing shortage is behind us. We’re still having to be persistent, strategic and creative when it comes to getting people into homes.”
Supply levels are too low for prices to fall but rates are too high for prices to rise much. The median home price in March was up 2.8% to $366,000 which amounts to $208 per finished square foot. During the month, sellers accepted offers on their listings after an average of 54 days (median of 24) compared to 58 days last March. Sellers are still in a relatively strong position, but some are having to make concessions by way of a price reduction, seller paid closing costs and other incentives.
“We’re in a unique place. The market remains tight even as we see it loosening a bit with more inventory and more buyers coming out to shop,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “A market like this is never monolithic. Every price point, segment and area are different—sometimes very different. That’s why it’s important to partner with an experienced real estate professional.”
Location & Property Type
Market activity always varies by area, price point and property type. Existing home sales rose faster than new home sales. Single family sales rose while condo and townhome sales declined. Sales over $500,000 rose at over five times the rate of sales under $500,000. Cities such as Robbinsdale, Columbia Heights and Corcoran saw among the largest sales gains while Forest Lake, Victoria and Delano all had notably weaker demand. For cities with at least five sales, the highest priced areas were Medina, Lake Elmo and Orono while the most affordable areas were Red Wing, Mora, Columbia Heights and Faribault.
March 2024 Housing Takeaways (compared to a year ago)
- Sellers listed 5,261 properties on the market, a 4.0% increase from last March
- Buyers signed 4,028 purchase agreements, up 7.8% (3,238 closed sales, down 0.9%)
- Inventory levels rose 8.4% to 6,879 units
- Month’s Supply of Inventory rose 20.0% to 1.8 months (4-6 months is balanced)
- The Median Sales Price was up 2.8% to $366,000
- Days on Market was down 6.9% to 54 days, on average (median of 24 days, down 11.1%)
- Changes in Pending Sales activity varied by market segment and price point
- Single family sales rose 12.8%; condo sales were down 15.6%; townhouse sales decreased 1.2%
- Traditional sales were up 8.0%; foreclosure sales fell 11.9% to 37; short sales rose 11.1% to 10
- Previously owned sales increased 8.9%; new construction sales were up 2.3%
- Sales under $500,000 rose 3.9%; sales over $500,000 increased 20.3%
New Listings and Pending Sales
Inventory
Weekly Market Report
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The share of homebuyers who paid cash for their home reached a 10-year high recently, according to the National Association of REALTORS®, with cash buyers accounting for 32% of all home purchases in January. Real estate investors and vacation-home buyers made up the majority of cash buyers during the past 6 months; among those consumers who paid cash for a home purchase last year, 26% were repeat buyers, while just 6% were first-time buyers.
IN THE TWIN CITIES REGION, FOR THE WEEK ENDING APRIL 6:
- New Listings increased 32.2% to 1,383
- Pending Sales decreased 0.7% to 892
- Inventory increased 13.4% to 7,048
FOR THE MONTH OF FEBRUARY:
- Median Sales Price increased 4.6% to $358,000
- Days on Market decreased 3.3% to 59
- Percent of Original List Price Received increased 0.3% to 97.5%
- Months Supply of Homes For Sale increased 35.7% to 1.9
All comparisons are to 2023
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
9 Mistakes To Avoid When Buying New Furniture, According To Designers
PHOTO: EMILY FOLLOWILL; DESIGN BY WYETH RAY INTERIORS
Expert advice to thwart uncomfy sofas and buyer’s remorse.
Much to the consternation of our wallets (and our better judgment), a little impulse shopping is hardly the end of the world. That is, unless you’ve gone and made a major, spontaneous purchase. Then, you just might find yourself facing an over-extended budget and buyer’s regret.
Furniture is one thing that should never be bought on a whim. This is one impromptu purchase that is far too expensive, heavy, and burdensome to replace if you decide to return it as quickly as you bought it.
Instead, interior designers recommend taking your time when shopping for furniture, and putting some serious thought and planning in before making any decisions. For example, designer Caroline Agee advises furniture shoppers to consider functionality, style, durability, and cohesiveness before taking anything home with them.
When shopping for new furniture, keep notes with you about ideal dimensions and bring fabric swatches with you while you shop. Anything you can do to feel more confident in your choice will lead to less buyers remorse.
To make the smartest furniture buying decisions possible, we’ve compiled a list of mistakes to avoid. Interior designers say that ignoring these oversights may lead to disappointing furniture that’s improperly scaled, low quality, or not meant for the long haul.
Buying First, Planning Later
Before you even begin browsing, a planning stage is essential, designers reveal. Shopping unprepared might just be the biggest furniture woe yet.
“Purchasing furniture isn’t like purchasing artwork,” says Ray. “With art, you can almost always find a home for it. Artwork doesn’t need to necessarily work with anything else in the space. With furniture, it needs to be the right size, color scheme, and style to fit in with your space.”
Agee agrees, sharing her strategy to bypass this miscalculation: “I always determine what dimensions would work best before I begin looking for a piece of furniture,” she says. “It’s best to have a furniture layout for a space so you have a long-term plan. Having a plan not only helps determine what dimensions will work best, but also helps to coordinate the style, fabric, and finishes of multiple pieces. It also helps to avoid ending up with pieces that don’t end up working.”
Overlooking Function
Considering function before shopping is top priority, designers say. With some foresight, you’ll surely save yourself lots of time shopping around and ultimately settle on a more fitting piece of furniture.
“Think about functionality for a space,” says Agee. “For instance, you may have room for a console table, a chest with drawers, or a cabinet with doors. Having an idea of what will function best helps you spend less time searching for the right piece.”
This rule applies to both choosing what kind of furniture you’re on the prowl for, as well as critical details. Agee also says that one common mistake she sees furniture shoppers make is not putting enough thought into what kind of fabric will best suit their functional needs for an upholstered piece. Consider your durability needs, she says, and interior designer Sarah Brannon recommends that shoppers consider whether or not they wish to choose a performance fabric.
Living Solely In The Moment
When shopping for furniture, think long-term. Interior designers agree that considering longevity is critical—both from a quality and design perspective. Ray recommends avoiding short-lived trends and asking yourself the questions: “Will I love this in 5 years? 10 years?”
At times, thinking long-term might even mean making sacrifices in the short term. These days, furniture can take what feels like ages to arrive, but Agee reassures that timeless, quality furniture will be worth the wait.
“I think people often want what’s available the soonest or they want to save money by buying a less expensive piece of furniture,” she says. “The best way to be happy with furniture for a long time is by carefully weighing the options and being okay with spending a little bit more or waiting slightly longer for it to arrive. Of course, if you spot a one-of-a-kind piece that you love, you should go for it!”
Buying To Fill A Gap
Like decor, furniture shouldn’t be purchased only for the sake of closing a gap. Just because you’re in the market for a new coffee table, doesn’t mean that you should settle for the first one you see.
“Furniture shouldn’t be purchased simply because you have a hole to fill,” says Ray. “It should be something that caught your eye compared to all of the other options. Something that drew you in.”
Taking Furniture At Face Value
Looks aren’t everything. Like for people, beauty has to come from the inside. In fact, if something must slip through the cracks, it should be design over quality. While falling for a short-lived furniture trend isn’t advisable, it’s much easier to fix the look of a piece than its foundation.
“I have consigned pieces that no longer work with my aesthetic,” Agee admits to her own past furniture mistakes. “Quality pieces can be transformed with paint, a new finish, or new hardware too.”
To avoid such missteps, Ray recommends researching a piece rather than simply being satisfied with the look of it online or in a showroom. Once you find a piece of furniture you’re interested in, take a step back and do your due diligence to make sure it’s right for you.
“Do your research on the quality of the piece,” Ray advises. “What materials is the piece made from, for instance is it real wood, and what kind of cushion content does it contain? Even if something is inexpensive, you’re throwing away money if it isn’t going to last you but a year or two.”
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Bony Upholstery
Having selected many pieces of furniture in her days as a designer, Ray reveals that there’s a sure-fire way to tell if a piece of upholstery is quality enough to consider buying.
“If you push on the arm or back of upholstery and can feel the wood through the fabric, it’s going to be a no,” she says. “Look for thicker upholstery with plenty of cushion. Remember, when viewing furniture in a store or showroom, you are seeing the best that a piece of furniture is going to look, so you need to feel it’s of good quality.”
When you sit and sample on a showroom piece, if it demonstrates this red flag, then the furniture is immediately out of the running, Ray says—not even worth moving on to the research phase.
One-Stop-Shopping
“Do not one-stop-shop for your room,” Brannon pleads. “Mix it up from various places and select colors, patterns, and textures that are interesting!”
In addition to building a space that’s layered and appealing, considering multiple stores is a reliable way to avoid making an impulsive purchase. Agee recommends shopping around for the best piece to suit your needs, style, and budget before coming to any decisions.
“Once I have an idea of the style and dimensions of the piece I’m looking for, I like to look at multiple stores for similar pieces that I like,” she says. “Then I can compare them based on a number of criteria, like price, finish options, and lead time. Comparing multiple pieces helps me eliminate which ones aren’t my favorite. This helps me feel like I’m making the best decision and prevents buyer’s remorse.”
Pigeon-holing Pieces
When shopping for multiple pieces of furniture, another way to shop for furniture to build an interesting and layered space is to push the boundaries of design. Rather than feeling limited by a strict color palette, design style, or any other constraints (apart from space), creativity is encouraged.
“I love when various design styles are used cohesively in one space,” Agee says. “My favorite rooms incorporate old and new pieces in various finishes. It’s fun to mix a neoclassical antique with a mid-century modern piece, and sleek current upholstered pieces. Mixing styles and finishes helps a space feel collected and personal to the homeowner.”
Bad Bones
A reliable and beautiful piece of furniture that’s in it for the long haul begins with good bones. Cushions can be replaced, wood can be restrained, and fabric reupholstered, but if the foundation of a piece of furniture fails, you’ll be back at square one of the furniture shopping dilemma.
“It’s important to pick furniture pieces with good lines,” says Agee. “A new coat of paint or fabric can’t fix a bad silhouette. I look for silhouettes that are sleek and timeless.”
Mortgage Rates Move Toward Seven Percent as Markets Digest Incoming Data
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April 11, 2024
Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve’s monetary policy path. While newly released inflation data from March continues to show a trend of very little movement, the financial market’s reaction paints a far different economic picture. Since inflation decelerated from 9% to 3% between June 2022 and June 2023, the annual growth rate of inflation has remained effectively flat, ranging from 3.1% to 3.7% and averaging 3.3%. The March estimate of 3.5% annual growth is in the middle of that range. However, the market’s reaction was dramatically different, as illustrated by a significant drop in the Dow Jones Industrial Average post-announcement.
It’s clear that while the trend in inflation data has been close to flat for nearly a year, the narrative is much less clear and resembles the unrealized expectations of a recession from a year ago.
Information provided by Freddie Mac.
New Listings and Pending Sales
Inventory
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