Twin Cities Housing Market 2024: Navigating Change
Minneapolis Association of Realtors’ monthly housing market update video, summary, and full transcript for September 19, 2024. This comprehensive resource is designed to enhance your understanding of the current housing market and its key trends.
Video Summary of The Most Discussed Items 
1.	Housing Supply vs. Demand (6:02): Housing supply is growing slowly, while demand can fluctuate more quickly. Builders face challenges in increasing supply, while rising demand, especially during COVID, overwhelmed supply and pushed up prices.

2.	Interest Rates and Market Sensitivity (7:18): A significant decline in interest rates could quickly increase demand, causing housing prices to rise. While rates have started to decline, they remain a primary factor influencing market affordability and buyer behavior.

3.	Home Prices and Affordability (31:08): Median home prices rose by 2.4% year-over-year from $380,000 to $389,000 in August 2024. Affordability remains a concern due to both high prices and interest rates, but there’s optimism that falling rates could reduce mortgage payments even if home prices continue to rise.

4.	Showings and Buyer Activity (11:03): Showings in early 2024 were strong, especially in the luxury segment (homes priced $1 million+), which saw a 36% increase. Overall showing activity had slowed as interest rates rose but showed signs of picking up again as rates started to decline.

5.	Price Reductions and Market Time (36:49): About 20% of homes required price reductions, which is the highest level since 2017. Homes are staying on the market longer, with an average of 20 days on the market in August 2024, up from 10 days during the height of COVID but still consistent with pre-pandemic levels.
Home Market Insights:
•	Time on Market: Homes are staying on the market for an average of 20 days, reflecting slower market conditions compared to the last few years.

•	Price Trends: Home prices increased by 2.4% year-over-year, with the median home price reaching $389,000. Affordability is still a concern, especially for first-time buyers.
Concerns and Optimism for the Rest of 2024:
•	Concerns: High mortgage rates and affordability challenges remain key concerns for the market. Although rates are declining, they haven’t dropped low enough to trigger a significant demand surge yet.

•	Optimism: There is cautious optimism that falling interest rates will spur more buyer activity and support home prices. A potential decline in rates to around 5% could bring out more pent-up demand, but there are concerns that this could also lead to another overly competitive market with multiple offers and price increases.

Full Transcript

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Interest Rates and Market Sensitivity
1
Rate Decline
Interest rates have started to fall, potentially increasing buyer demand.
2
Market Impact
Lower rates could boost affordability and stimulate the housing market.
3
Future Outlook
Further rate drops may lead to increased competition and price growth.
Home Prices and Market Activity
Price Trends
Median home prices rose 2.4% year-over-year to $389,000 in August 2024.
Affordability remains a concern due to high prices and interest rates.
Buyer Activity
Strong showings in early 2024, especially in the luxury segment.
Overall showing activity slowed but is picking up as rates decline.
Market Time
Homes stay on market for an average of 20 days, up from 10 during COVID.
20% of homes required price reductions, highest since 2017.
2024 Outlook: Concerns and Optimism
Affordability Challenges
High mortgage rates and home prices continue to impact buyer affordability, especially for first-time homeowners.
Potential Market Surge
Falling interest rates could trigger increased buyer activity and support home prices, potentially leading to a competitive market.
Balanced Growth
Cautious optimism for a more balanced market if rates stabilize around 5%, bringing out pent-up demand without overheating prices.
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