Comparing interest rates and home sales 2016-2017

Newly built homes along the Humboldt Greenway.

Newly built homes along the Humboldt Greenway.

In 2016, the Federal Reserve was poised to raise the interest rates by a significant .025 percent. It was signaling the start of a new trend in climbing interest rates ending the historic trend of low interest rates. So where are we today?

In December 2015, the interest rate at .14 percent was a just a hair above the bottom historic level of .06 percent. By December 2016 the interest rate level went up to .41 percent, by January 2017 it notched up to .66 percent, and by November of this year broke the 1 percent level and landed basically one full percentage point above 2015 at 1.16 percent.

The 65 newly built homes along the Humboldt Greenway are almost completed. For sale signs are disappearing relatively quickly. And just two blocks away, the new multimillion dollar Webber Park Library, and North Market grocery store buildings at 44th and Humboldt both have their walls up, lights on, and doors open [Market opens Dec. 13], breathing a fresh bit of life into the seven neighborhoods of the Camden Community.

In 2016, the median price of traditional sales in Minneapolis ($241,300) remained comparable to the regional median sale price ($235,000) for the last quarter. Over a 12-month period the number of traditional housing sales in Minneapolis increased by 9.5 percent, and lender-mediated sales decreased by 49.6 percent, continuing to reflect the declining number of  distressed properties in the market (City of Minneapolis’ Minneapolis Trends report for 2016).  However, the newest housing development in the Camden Community along the Humboldt Greenway saw some homes sell this summer for well over the 2016 regional median price at $271,000 and $353,400. The Monthly New Residential Sales, September 2017 report by the U.S. Census Bureau, also shows that nationally, the median sales price of new houses sold in September 2017 was $319,700, and the national average sales price was $385,200.

While these homes might not fall within the affordable category for some, a mix of housing is needed in order to attract new home buyers, renters, businesses and jobs to our community. Minneapolis residents enjoy many amenities in the city. Having a wide variety of housing helps diversify the tax-base and help the overall growth of Minneapolis and the economy for the long-term