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Motivated buyers help Twin Cities housing market to 10-year September high

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The Twin Cities' housing market is still booming, with September seeing the highest number of sales in 10 years as buyers take advantage of low interest rates.

There were 5,114 closed sales in the 13-county metro area last month – a 12 percent rise on last year and the highest since the 5,648 sold in Sept. 2005, according to the latest figures from the Minneapolis Area Association of Realtors.

It is putting the Twin Cities on a pace for the highest closed sales seen in the past decade. Sales in August were up 7.8 percent to 5,811, while in June they reached a 10-year high when 6,928 homes changed hands.

Buyers are being encouraged by the fact the U.S. Federal Reserve has not yet raised interest rates, which is in turn keeping mortgages cheap. And with indications suggesting the Fed will raise them before the end of the year, there is motivation to buy now rather than later.

It's also a good time for sellers, with the median sale price in September hitting $222,000, an increase of 8.3 percent last year and higher than the year-to-date median price of $220,000, while sellers are accepting offers at a median of 99.2 percent of their final list price.

Demand for housing is far outstripping supply, helping those who are selling. There was a 6.9 percent decrease in new listings last month compared to 2014 – down to 6,355.

The number of active units for sale also fell 16 percent to 15,928.

Tom Weiner, of Cardinal Realty in Oakdale, told the Star Tribune part of the rise in September was down to an "unusual" increase in first-time buyers, which he put down to a combination of confidence in the jobs market, the threat of higher house prices in the future, and fear over interest rates rising.

The newspaper notes the average 30-year fixed-rate mortgage was at 3.86 percent in the last week of September, down from 3.91 percent a week earlier and 4.20 percent in the same week in 2014.

Research from the University of St. Thomas last month found the price of a single family home in the Twin Cities rose by 2.7 percent in August alone, but despite this it is still one of the most affordable major metropolitan areas in the country in which to live.

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