Home buying in the Twin Cities is ramping up this spring but not nearly at the same pace as last year, as higher mortgage rates and a decline in listings stifle sales.

During March, buyers signed 3,767 purchase agreements across the metro, according to a monthly sales report from the Minneapolis Area Realtors (MAR). That was a 28% increase from the previous month but a 28% decline compared with last year.

"It's a better market, it's calmer," said Pete Lentine, a Twin Cities real estate agent who said the shift in the market is a complete contrast to the out-of-control spring market last year.

Buyers weren't the only ones on the sidelines this spring. Sellers were also far less active than last year, listing only 4,980 houses, a 24% annual decline that's nearly kept pace with the decline in buyers. And on average, houses sold in just 57 days during March compared with 35 days last year.

"While we do still see some competition for the most desirable listings, buyers don't feel quite as rushed as they did a year or so ago, and they are being more selective," MAR president Jerry Moscowitz said.

Julie Desrochers of the Desrochers Realty Group said a competitively priced and thoughtfully staged house often garners more than one offer. An agent on her team recently listed a $300,000 house, which netted 52 offers. Another agent had a client who offered $25,000 more than the asking price on a $425,000 house in south Minneapolis and didn't land it. Theirs was one of nine offers.

While those situations are the exception rather than the rule, buyers are more likely to pay a little less than last year. The median price of all closings during the month was $355,000, flat compared with last year but up from $342,000 during February.

Though it's becoming easier to be a buyer, the fundamentals suggest it's still a seller's market, though not as solidly as last year at this time.

There were 5,769 houses for sale at the end of March, just 2% more than last year. At the current sales pace, there were enough houses for sale to last 1.4 months. The market is considered balanced between buyers and sellers when there are enough listings to last four to six months.

During the month, there were 3,156 closed sales, a reflection of how many deals happened two to three months earlier. That's was a 21% decline compared with last year, and this was the 10th consecutive month of double-digit year-over-year declines.

Statewide, the trends were similar, according to a separate report from Minnesota Realtors, which shows closings were down 20.2%, and the median sales price was nearly flat at $320,000. New listings decreased 24.7% to 6,765. The inventory of homes for sale increased 4.9% to 8,836.

The market started cooling in June 2022 after mortgage rates started rising. By late in the year, rates had doubled from all-time lows. For five weeks in a row, however, mortgage rates have declined slightly, just in time for the busiest buying season of the year.

On Thursday, Freddie Mac said the 30-year fixed-rate mortgage (FRM) averaged 6.27%, according to its weekly rate survey. A year ago, the 30-year FRM averaged 5%.

Despite the slowdown in sales and the flattening in sale prices, agents say there are plenty of buyers who are ready to buy but are waiting for the right house or wondering if home prices are going to suddenly decline.

Lentine said he was working with a buyer earlier this year who had the luxury of being able to look at six houses. Suddenly, four of them had offers, forcing the buyer to make a quick decision.

"Buyers and sellers have to get a grip on what real value is these days," he said. "If your neighbor sold their house last year for $60,000 over list [price], that doesn't mean you're going to get that this year."