The latest report from the Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS® highlights a cooling Twin Cities housing market as buyer and seller activity dipped in August 2024.

Pending sales fell by 10.2% and new listings dropped by 3.3%, underscoring a trend of reduced activity compared to the same period last year​.

Despite the slowdown in activity, home prices continued to climb, with the median sales price reaching $389,700, a 2.6% increase from last year. This upward trend in pricing is partially driven by limited housing supply, which increased by 11.7% but still hasn’t caught up with the growing demand​.

Inventory remains tight, and experts anticipate that this shortage could continue to pose challenges for buyers, especially in the lower-price segments.

However, some relief may be on the horizon for prospective buyers. The Federal Reserve is signaling potential interest rate cuts as early as September 2024, which could push mortgage rates lower.

Jamar Hardy, President of the Minneapolis Area REALTORS®, noted, “While lower mortgage rates could unlock some pent-up demand, inventory remains the biggest hurdle. Even with more homes entering the market, it’s unclear if this will fully address the affordability issues many buyers face.”

With the possibility of rate cuts, the outlook for the Twin Cities housing market could improve slightly, but ongoing inventory issues may keep the market competitive for buyers heading into 2025.