Despite high interest rates, buying a home is more affordable as housing market cools
MINNEAPOLIS -- After two years of almost non-stop growth, Minnesota's housing market is finally cooling off.
The new October housing report from Minnesota Realtors shows home sales down 31% compared to last year.
WCCO's Allen Henry spoke to local agents who say the drop isn't necessarily a bad thing, just a return to normalcy.
Shelly Montbriand Pomonis became a REMAX agent in June.
"A lot of people paid maybe $50,000 or $60,000 more than asking and sometimes there were 23 offers on the table," Pomonis said.
Since then, things have cooled off, typical for this time of year, but even more so with the impact of inflation and interest rates.
"Things really turned and so now we're seeing properties that have been on the market even a couple of months," said Pomonis.
"The number of applications for mortgages dropped quite significantly. A number of buyers in the market have been outpriced at one point and now they're being out-interest rated," said Realtor Coral Kenyon.
Realtors tell WCCO buyers are the ones benefiting from the changes in the housing market.
Earlier this year, buyers might have had lower interest rates but they had to give offers above the asking prices just to compete.
Now, they may face higher interest rates but they have time to explore their options, negotiate a better price and not skip important things like inspections.
"You pay 6% for your interest rate -- you can negotiate that and refinance your house. So I would that is actually a better option than paying $60,000 more than it was listed at," said Pomonis.
This means one of the biggest purchases of your life might actually be more affordable now.
"We're seeing more open houses, we're seeing more negotiations with buyers, we're seeing sellers willing to negotiate and it's been a long time since that happened," said Kenyon.
