Expert: Spring Housing Outlook Facing ‘Dual Crises’
The spring house market has a not-so-pretty picture for potential buyers, especially those looking to buy their first home. The current market is experiencing what’s described as “dual crises.”
“We have these dual crises of affordability and inventory, where we just don’t have enough homes to sell people,” said David Arbit, director of research for Minnesota Realtors.
The remarks came during the 33rd annual Real Estate Forum hosted by the city of Brooklyn Park.
According to Minnesota Realtors data, home prices continue to rise. The median sales price in the Twin Cities is now $380,000.
Meanwhile, there continues to be a supply shortage. Data show almost the exact number of homes for sale as last year — 7,222 this year compared to 7,221 last March.
Arbit did point to promising sign. Mortgage rates have fallen in recent weeks.
“We’re wondering if it’s coming down for the right reasons — whether there’s some concern around growth — or if inflation is cooling and we can start to drop rates a little bit,” said Arbit. “I think that should spur demand a little bit, but then do we have the inventory to sell them?”
The average interest rate for a 30-year fixed-rate mortgage is around 6.75 percent. Arbit said the best-case scenario this summer is for rates to come down to high 5 or low 6 percent.
According to Minnesota Realtors, the typical mortgage payment has gone from $1,800 a month to $2,800 a month just in the last three to four years.
“It’s really the first-time buyers who are struggling most and that’s really unfortunate, because we want to see them get into homeownership and start gaining generational wealth and really all the other benefits that go with homeownership,” said Arbit.
David Arbit, director of research for Minnesota Realtors. in an interview with CCX News
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