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Twin Cities Real Estate Affordability Hits 34 Month High

The Minneapolis Area Association of REALTORS released their weekly market report today with new Housing Affordability Index numbers for December 2007.  The HAI of 141 is the highest we’ve seen in the Twin Cities since February 2005… nearly 3 years ago.  Falling mortgage rates, with many brokers quoting under 6% for a 30-year fixed), and lower sales prices has improved affordability by over 10% in just 3 months!

With mortgage rates and home prices down, the market is starting to look better for 1st time buyers and move-up buyers as well.  The median sales price is down $10,000 to $220,000 from $230,000 in October 2005… a reduction of 4.3%.  Some individual areas are doing significantly better, some are doing significantly worse.  Even in the same community, there is a disparity between the pricing changes in single family homes, townhomes, and condos.

Where will 2008 end?  My best guess is that prices will fall a little further and that interest rates will rise slightly, which means affordability may not go much higher than it is now.  Only time will tell!

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TwinCitiesRealEstateBlog.com is not a Multiple Listing Service MLS, nor does it offer MLS access.
This website is a service of Aaron Dickinson of Edina Realty, a broker Participant of the Regional Multiple Listing Service of Minnesota, Inc.