Interest rate angst hasn’t stopped Twin Cities homebuyers

Luke Bolton and his young family have been planning since last summer to upsize from a two-bedroom condo in Minneapolis to a bigger, newer home closer to relatives in Iowa, despite mortgage rates not cooperating with their timetable.

The Boltons — like many other Twin Cities homebuyers and sellers — decided to make the move this spring. Across the state, buyers and sellers are still grappling with the prospect that mortgage rates are likely to remain near 7% through much of the year after a recent inflation report dimmed hopes of a Fed rate cut sooner than later.

And yet, a listings logjam finally broke open and brought thousands of new homes to market, with new listings up 4% in March, causing the total number for sale at the end of the month to increase 8.4% to 6,879.

“We pushed ahead,” said Bolton, who works remotely for an Atlanta-based trade association. “Our boys are not getting younger, their grandparents in Iowa are not getting younger, and life goes on regardless of what the Fed and inflation does to the mortgage interest rates.”

Last month, buyers signed 4,028 purchase agreements, 7.8% more than last year at this time, according to a monthly sales report from the Minneapolis Area Realtors. Closings, a reflection of deals signed a couple months ago, were flat compared to last year, and the median price of those closings was $366,000, a 2.8% increase from last year.

“It’s clear that people are ready and eager to get deals done,” said Jamar Hardy, president of Minneapolis Area Realtors, in a statement.

The March report marks the fifth-consecutive month of year-over-year increases in new listings and the fourth-consecutive increase in pending sales. Those gains are a likely sign buyers and sellers have finally adjusted to today’s mortgage rates — which are now in line with historic averages but nearly double what buyers nabbed two years ago — and are ready to move despite them.

The Boltons bought their Minneapolis condo several years ago, giving them enough time to earn equity to offset the impact of higher mortgage rates. With two boys, 11 and 14, they’re able to trade up to a three-bedroom, two-and-a-half-bathroom new-build condo in Des Moines for $252,500.

Bolton started preparing for the move last summer by clearing out the condo, either selling or giving away unneeded items. The family refinished the kitchen cabinets, rented a storage unit for overflow items and — after almost daily trips to the storage locker — were ready to list the house in early March. That timed perfectly with a spring break trip to visit the Iowa in-laws so their agent could show the home while they were out of town.

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