Market Overview: Prices and Inventory

The average home value in Minnesota stands at $337,891, reflecting a 2.7% increase over the past year . In March 2025, the statewide median home price reached $345,000, with the Twin Cities metro area reporting a higher median of $380,000.

Inventory levels have seen a slight uptick, with active listings increasing by 4% year-over-year to approximately 13,786 homes . Despite this growth, the market remains tight, with only a three-month supply available, indicating a continued seller's market.

🏡 Buyer Behavior and Affordability

Rising mortgage rates have heightened buyer sensitivity to monthly payments. The typical all-in monthly payment for a median-priced home, including taxes and insurance, is about $2,500 statewide and $2,800 in the metro area, up from $1,800 in 2021

In January 2025, 23% of homes sold above list price, while 24.8% experienced price reductions, indicating a balanced negotiation environment . Homes are spending more time on the market, with the median days on market increasing to 54 days, providing buyers with more opportunities to negotiate.

🏙️ Urban Trends: Minneapolis and St. Paul

In Minneapolis, the median home sold price in April 2025 was $354,417, marking a 3% increase from the previous year . However, the city has faced challenges in housing construction, with only 800 housing permits issued from March 2023 to March 2024, compared to an annual average of 3,500.

St. Paul's rent control policy, initially capping annual rent increases at 3%, is under reconsideration. The City Council is debating a proposal to exempt new housing built in 2005 or later from the ordinance, aiming to stimulate construction and address the 80% decline in housing permits since 2020.

🔮 Outlook for 2025

Forecasts for Minnesota's housing market vary:

• Zillow predicts a modest 0.2% increase in Twin Cities home values.

• Realtor.com anticipates a 6.2% rise.

• Local expert David Arbit forecasts a 4-5% increase, expecting higher sales volumes due to mortgage rate adjustments and wage growth .

Overall, while the market remains competitive, increasing inventory and policy adjustments may offer more opportunities for buyers, especially as affordability challenges persist.