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Twin Cities home sales still rising; some renters find it's cheaper to buy

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Housing sales in the Twin Cities area hit a 10-year high in June. And then climbed higher in July.

The latest numbers from the Minneapolis Area Association of Realtors show closings were up 17 percent last month.

Meanwhile, the number of homes put up for sale dipped slightly (0.4 percent), further shrinking the supply on the market.

So, to review: sales were up and the supply is shrinking. A recipe for higher prices.

Indeed, the Realtors' report says the median sales price in the Twin Cities area rose nearly five percent in July and has now reached $225,000.

But there's a wrinkle. Rents are going up even faster.

The Star Tribune visited Brian and Jenn Burke, who learned their rent was going up nine percent. They responded by buying a home in southwest Minneapolis that is twice the size of their former apartment and costs less.

The newspaper points out numbers from the real estate website Zillow showing renters in the Twin Cities are typically spending more than 25 percent of their income on rent, while homeowners are spending 13 percent on mortgage.

The president of the Minneapolis Area Association of Realtors, Mike Hoffman, says some had begun to wonder if today's young adults would be permanent renters. But he notes nationwide figures showing that millennials now comprise about one-third of all buyers and two-thirds of first-time buyers.

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