As potentially the brightest sun in the current economic recovery, housing activity has followed the mercury higher this summer. Interest rates and new construction activity have been in the spotlight lately, fueled by concerns over tapering Federal Reserve activity and ongoing inventory constraints. Watch for indications that more homes are selling in less time and at higher price points. Also watch for sellers returning to an inviting marketplace, which will help replenish neighborhoods with new listings.
New Listings in the Twin Cities region increased 20.0 percent to 7,627. Pending Sales were up 14.2 percent to 5,421. Inventory levels shrank 17.2 percent to 15,193 units.
Prices followed the mercury higher. The Median Sales Price increased 17.5 percent to $210,000. Days on Market was down 34.5 percent to 74 days. Absorption rates improved as Months Supply of Inventory was down 27.1 percent to 3.5 months.
The economy – which generates the jobs that fuel housing demand – continued to improve at a moderate pace during the second quarter of 2013. Budget sequesters and sluggish export growth have taken a back seat to housing recovery and stronger consumer spending. Interest rates could flirt with 4.0 or 4.25 percent again but the days of 3.3 percent interest are likely.