Market Overview: Spring 2025

June 14, 2022 · Mike Juliff

New listings in the Twin Cities metro area increased by 12.1% year-over-year in March, indicating a seasonal uptick as sellers enter the market.
Despite this increase, overall inventory remains low, with approximately 7,600 homes on the market, significantly below historical averages.

Buyer activity is robust, particularly for homes priced between $250,000 and $500,000, leading to multiple offer situations and quick sales.
Homes are selling rapidly, often within days of listing, especially in the mid-price range.

The median sales price in the Twin Cities metro rose by 3.5% year-over-year in March, reaching $380,000.

Mortgage rates have stabilized around 6% to 6.5%, which, while higher than pandemic-era lows, are prompting some homeowners with previously low rates to delay selling.

Seller’s Market: With approximately 2.0 months of housing supply, the market favors sellers, as a balanced market typically requires 4–6 months of supply.
Increased Listings: The rise in new listings suggests that homeowners are gradually adjusting to current mortgage rates, contributing to a slight easing of inventory constraints.
Affordability Challenges: First-time buyers face hurdles due to rising home prices and higher mortgage rates, leading to increased competition and the need for strategic offers.

Sales Volume: Existing home sales are projected to increase by 7% to 12% in 2025, driven by improved inventory and buyer adaptation to current mortgage rates.
Price Appreciation: Home prices are expected to continue a modest upward trajectory, with forecasts indicating a 2% to 5% increase over the year.
Market Balance: While inventory is improving, the market is anticipated to remain tight, maintaining a seller’s advantage in the near term.

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