Twin Cities housing pinch coming from both sides
Home buyers, especially first timers, continue to deal with a short supply of houses on the market, bidding wars and waived inspections. But Plan B — renting an apartment — is getting a bit more expensive.
Driving the news: After a year of stagnating rents brought on by the pandemic, prices for rental housing in the Twin Cities increased in July to just over $1,600 a month, according to Zillow.
- That 4.1% jump from the same time last year puts rents nearly where Zillow projected them to be before the pandemic.
Yes, but: There are still deals to be found, especially in downtown Minneapolis. Now is typically when landlords are trying to fill up their buildings before winter.
- For example, the Wilf family’s new apartment building near U.S. Bank Stadium — 240 Park Avenue — is advertising two free months of rent for new leases.
Between the lines: With rents rising again and mortgage rates remaining low, it would seem to be a good time to buy a house.
- But there's only about 7,600 houses on the market in the Twin Cities, down 25% from this time last year, according to the Minneapolis and St. Paul Area Realtors associations.
- The median home spent just seven days on the market last month, down from 17 days a year ago and 25 in 2016.
What they're saying: "With offers still coming in at an average of 3.6% over original asking price, more people are understanding the strength of this market," Todd Walker, president of Minneapolis Area Realtors Association, said in a news release.
What's ahead: The good news is that housing construction starts in the Twin Cities metro are on pace for about 25,000 new units in 2021, according to the U.S. Department of Housing and Urban Development.
- That would be the most new housing starts since 2004.
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