Getting a bead on how this spring’s housing market is faring can be less than reliable if the conclusion is based on national summaries. Last week offered a good example.

Take USA Today’s Friday report, which included a section promising “What is happening with home sales?” It seemed to merit one of those frowny-faced emojis since it highlighted the Pending Home Sales Index, a forward-looking indicator. The PHS showed pending transactions were “down by 23%” from last year’s total. The explanation from NAR^® Chief Economist Yun cited the stubborn persistence of an inventory shortfall. “The lack of housing inventory is a major constraint to rising sales,” said the economist.

But the following discussion included this fact: the national unsold inventory currently holds a 2.6-month supply—which is significantly greater than the 2.0-month supply registered a year earlier. Why an increase in the supply of homes being offered could result in a pending transaction drop of 24% would have to leave careful readers wondering how to explain the contradiction…

In fact, the explanation for the national (not necessarily St. Cloud real estate) market’s performance would have to be ascribed to other factors. And in fact, the same report cited rising home prices and elevated mortgage rates (6.5%, nationally) as why “Spring has not yet sprung” in the national market. The obvious impact on affordability would certainly dampen the pace of mortgage-aided sales, causing home loan applications to fall and increasing the market share of all-cash transactions. Another impact of higher prices would leave current home sellers better able to afford their next home purchases. That’s exactly what the NAR reported: nearly 27% of the recent buyers made all-cash purchases.

But the future may be looking at least a little bit brighter than the unsprung spring headlined on Friday. “MBA expects mortgage rates to decline slowly as the year progresses…and may spur sales activity” was among later conclusions. For local buyers and sellers, though, it’s wiser to contact me for a precise read on this spring’s St. Cloud real estate market. It can be less ambiguous than reports on national results—and much more relevant! 

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