Posted by Melissa Burlaga
Duluth, MN (Northland's NewsCenter) Minnesotans are finding home ownership more affordable.
Historically low interest rates – hovering around four percent for a 30-year fixed rate mortgage – have resulted in reduced monthly housing payments, making it easier to purchase a home.
“Slower sales activity and aggressive Federal Reserve Board actions have lowered the rates on fixed term mortgages,” said Russ Portele, President of the Minnesota Association of REALTORS®. “Because of the lower interest rates, home buyers at every price point are able to purchase homes at much lower monthly costs than they would have five, 10 or even 20 years ago.”
Consumers with good credit, home equity and consistent employment are benefiting the most from this market.
Many sellers understand that a 10 percent price reduction on their existing home price is worthwhile because they’ll save at least that amount on the higher priced home they plan to buy.
“We’re seeing a number of sellers motivated by the low rates and outstanding values,” said Portele. “Many are looking to move-up to larger homes which are more affordable than they expected because of suppressed prices and low interest rates.”
Home prices, both the median and average, have stabilized and remain at about the 2009 price level.
Statewide the median home price was $154,000 in October 2010, a few hundred dollars higher than in 2009.
The average price is $186,843, an increase of $4,872 when compared with the average sold price in October 2009.
Median Home Prices across Minnesota
• 7-County Metro $175,750 +3.4%
• Duluth Area $133,000 +2.3%
• Brainerd Area $145,000 +5.8%
• St Cloud Area $136,000 -1.2%
• Mankato Area $118,900 -5.6%
• Rochester Area $132,900 -0.1%
• Alexandria Area $111,500 -3.0%
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•Fergus Falls Area $101,000 -5.1%
•Detroit Lakes Area $152,000 +8.6%
•Grand Rapids $118,000 -5.6%
•Southwest MN $ 98,000 -4.9%
•Range Area $ 78,800 +0.4%
However, home sales statewide continue to struggle. Inventory levels are high as the market absorbs more foreclosed and distressed sellers’ properties.
This makes for stiff competition for the homeowners looking to trade-up and take advantage of the unique market dynamics.
Many sellers are motivated and willing to take the steps necessary to sell their homes so they can benefit from the low rates and outstanding values available in many areas.
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