For some people, the housing market is challenging. For those trying to sell their house, there’s not as many buyers as there was a year or two ago.  

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And for those trying to buy a house, prices and interest rates are not your friends right now, so does the tag go to sellers in this square dance?  

According to the Minnesota Department of Housing and Urban Development, just nine short years ago, interest rates were around four percent. Rates until recently have been above seven percent.  

Tim Boyle via Getty Images

How does that impact mortgages? In 2014, a $350,000 home with an interest rate of 4.2% was $1,712 per month. Taking that same amount of money with a loan with 7.2%, the monthly payment goes to $2,376.  

According to Matt Wieber, the owner and broker of Agency North Real Estate, interest rates have moved down a little recently. “Rates have settled down” Matt says of recent interest rates coming in the 6 ¾% range. He says the market in the St. Cloud is more in balanced right now. 

The state of Minnesota is third in the country in the percentage of its residents that own a home. The Housing and Urban Development says that 72.1 percent of Minnesotans own a home.  

Matt says the national average is around 65% of residents who are homeowners. So, what about the other 35% of people who fall into the category of being renters?  

A national survey I read last week said that of the people who are renting right now, a record 40% say they feel they’ll never be able to afford to buy a home.   

Photo Credit: Dave Thomas Townsquare Media
Photo Credit: Dave Thomas Townsquare Media

Matt Wieber says that for those who are renting, there are a couple of challenges they face right now. First is the price. “Prices have risen quite a lot in the last few years. It is tough for people who are renting who don’t have equity to pull out” Matt says. Combine that with Interest rates that until recently have been above 7%.  

Matt says that for the foreseeable future, a lot of renters will continue to do so because of the prices and interest rates. “Some people are waiting for interest rates to come down, and it happens every four years, some people wait on the outcome of the election”. 

“Buyers have become acclimated to the higher rates right now” although Matt also says that there has been a good bit of people who are buying homes are using cash to avoid having to finance with the higher rates.  

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Home values in the area have flattened out from what they were a couple of years ago, which he offers helps stabilize the market in the area.  

With the costs of homes being higher, over the last few years, there have been a lot of people who realize they can make a good bit of money on their home if they sell, but some folks are facing the difficulty of being able to find a home that fits their needs that they don’t have to over pay for.  

One question I asked Matt was if he’s seeing folks who are older and/or who have owned their homes for a long time, decide to sell and then rent because of that. “I just put a house on the market like that” Matt says. “A few years ago, it was cheaper to own than rent, but those numbers have changed in the last few years”.  

For some folks in the 50’s, 60’s and 70’s having to maintain a home is no longer desirable, so they decide to rent. Matt says there have been improvements in the rental market in the area over the last few years, so renting is becoming more attractive to some.  

Photo Credit: Dave Thomas Townsquare Media
Photo Credit: Dave Thomas Townsquare Media

And still there are those people who will put the money from the sale of their home in the bank and then wait for interest rates and prices to come down again.  

Matt has some advice for those that are trying to sell their home right now or who are thinking of putting it on the market. “We’re still seeing some homes sell if they are presented properly and priced properly”. Matt also says that homes that are desirable for one reason or another are still getting multiple offers.  

There is still a shortage of inventory in the area, and the time it takes to sell a home has gone up over the last few years. “It may take a month or two to get a house sold” he says.  

The number of homes sold in the St. Cloud area is up about 20% from this time last year Matt says.  

At least for the near future, the housing market will have to improve to get some people involved, how long that takes to come to pass remains to be seen. The best advice is to start doing your homework now so when the time comes that you want to dive in, you are better prepared and ahead of the game so you can move faster. 


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