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What has been described as the "worst inventory shortage in decades" is driving Twin Cities house prices to even greater heights, with the median sales price now reaching $353,000.

That's according to the Twin Cities Housing Report from Minneapolis Area Realtors, which says the heating up of the spring market combined with record low inventory continues to push prices up.

In March, the median property sales price hit $353,000, a 7.5% increase compared to March 2021, and the first time the metro-wide median price passed the $350,000 mark.

The realtor association says the "ongoing inventory shortage is mostly to blame." The number of houses on the market is 12% lower than the same time last year, and the supply in March 2021 was 43% lower than the year before.

That means there is currently about four weeks supply of inventory, with Minneapolis Area Realtors noting that a "balanced market has roughly four to six months of supply."

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The report however notes that there isn't quite the same level of "frenzy" as there was last spring, with properties staying on the market slightly longer than a year ago.

There were 6,416 newly listed homes for sale during March, which is 4.8% fewer than last March, though 4.2% higher than March 2019.

The report notes that "some aging empty nesters are staying put and aging in place while others have chosen to remodel or expand their current home instead of listing it."

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Rising interest rates may be playing a role here, with som homeowners reportedly "married to their interest rates" and reluctant to move lest they lock into higher rates.

But Denise Mazone, president of Minneapolis Area Realtors, notes that even though a 1% rise would add around $187 per month to mortgage payments on a $350,000 home (with 10% down), equity gains over time are "likely to outpace the slightly higher payments."

It remains a sellers market, with the March figures showing sellers are accepting offers that are on average 2.7% higher than their list price.

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