A blast of arctic air combined with economic anxiety and other non-market factors slowed Minnesota's housing market in January. New listings declined 9.0% statewide while pending sales fell 11.4%, with the steepest drops in the most affordable price segments.

These declines come despite conditions that should favor activity. Inventory is near a six-year high, down just 0.3% in January, and mortgage rates held near a three-year low, averaging 6.1%.  

The statewide median home price rose 1.5% to $335,000, reflecting the ongoing supply deficit, more move-up buyers with equity, fewer first-time buyers, and more luxury activity. Sellers accepted offers at 96.0% of list price on average, up from last year and the highest level since January 2022.

The latest economic data on inflation and job growth came in stronger than expected, which bodes well for the housing market if the trend continues and interest rates cooperate. Data in the months ahead will tell us if a sluggish January was an aberration or a trend.