Southeast Minnesota Realtors releases August numbers on housing market
(ABC 6 News) – It’s a tough time for home buyers right now. Home prices keep rising and so do the interest rates.
After an unprecedented number of hikes this past year, mortgage interest rates are now up to 7.5 percent.
The Southeast Minnesota Association of Realtors just released its monthly numbers and although inventory, or homes for sale, is still low with recent numbers showing new listings are up year-to-date.
This time last year, 640 homes were for sale and this year in August there are 667. Although the number of available homes is up, the number of closed sales is down 24%.
Both interest rates and prices of homes are going up and first time home buyers are entering uncharted waters.
Emily Ness and her boyfriend Andrew Clark are buying a house for the first time. For the past several years they’ve chosen to rent, but say even rent is skyrocketing.
“Rent is going up, like everything is kind of going up right now,” said Ness. “I mean, if you’re kind of putting money towards living somewhere and it’s how much a specific amount. It’s like mine as well, just own it rather than renting it.”
Home values remain high because there’s so few of them. It’s an ongoing problem since the housing crisis in the mid 2000s, and local realtors don’t foresee that changing anytime soon.
“Every number that we’ve looked at, every economist is saying a very, very similar thing until the inventory shortage is corrected,” said Eric Bronwlow, Executive Director of SEMAR. “You’re going to continue to see an escalation in home values.”
On Tuesday, Senator Tina Smith held a hearing in congress on the current state of the housing market and learned a few things on how they can address the issue with legislation.
“We also heard about some really good, local innovations that are getting at this problem,” Smith said. “So one example of that is that local zoning and land use laws can contribute a lot to the expense of housing and we’re seeing communities around Minnesota really get at this and make reforms so that we can build more of the kind of housing we used to have in the old days.”
While it’s great in theory, it’s still a tough time for buyers who are simply struggling to afford a place to call home. But it won’t stop Ness and Clark.
“This process has been pretty nerve racking but also it feels so rewarding at the same time. I feel like I can really rely on knowing what the bankers are knowing, what they’re talking about on what we can afford,” said Ness.
There were just over 200 more newly listed homes in August than there were closed sales, but if priced right, buyers could still find themselves in a bidding war.