A new report says home prices continue to get more expensive across the metro.

The Minneapolis Area Realtors and the St. Paul Area Association of Realtors say the median sales price was up to $390,000 last month.

The report says that’s a ‘record high’ and that it looks like the market is in a cooling-off period.

“I think it goes back to supply and demand,” said Jamar Hardy, president of Minneapolis Area Realtors. “There’s still a lot of people, they’re looking for affordable housing options.”

The new report says purchase agreements have dropped nearly 11% and new listings are down nearly 6%.  

The two groups say all this adds up to a seller’s market — more supply than demand.

They say in June, the number of homes for sale in the metro was up nearly 11% over last year.

However, the report also shows there are several hurdles for would-be home buyers — around 7% mortgage rates are higher — and with those rising prices, it’s hard for some to find a house they can afford.               

Hardy believes some prospective home buyers may be skittish because of economic concerns in the wake of the pandemic.

“We really saw a high demand for housing,” Hardy explains. “We saw a lot of people, I would say, paying in a very pent-up demand market back then, and then, rates were low. I think a lot of people started the process, then kind of got beat up because of the multi-factors of competing with others around the same price point, and the prices being driven up.”

He says the market may be especially tough for first-time home buyers who don’t have equity from a previous sale and says he’s seeing more prospective home buyers pooling resources to purchase a new residence.

“If you’re doing it by yourself and depending on what you’re making year over year with your income, it does become a more expensive proposition,” Hardy notes. “So again, we’re seeing more people even before they get married, we see more people decide to get into home ownership with two incomes instead of one.”

He says if you’re considering buying that first home, look for affordable pockets within the metro.

Hardy notes you might not be able to buy your dream home right away.

He says instead, consider getting a starter home that you can invest in first and build some equity.

Hardy suggests a long-term plan will help get you to your goal.

“I would say just have that five- or ten-year plan, and maybe get in that entry-level neighborhood,” he says. “Maybe it’s three to five years after you get into the game. But there still has to be a pathway to get in and there are still affordable pockets throughout our city.”