2025 Year‐End Market Outlook: What to Expect in Minnesota Heading into 2026

As we wrap up 2025, Minnesota’s housing market is showing resilience — modest price gains, slowly growing inventory, and early signs that mortgage rates may be easing. Below is a concise state-of-the-market snapshot followed by our local, boots-on-the-ground take for the rest of the year and into early 2026.

State-of-the-Market Snapshot (latest data)

• Median Sales Price (statewide): Redfin reports Minnesota’s median sale price at $360,600 in October 2025 — up about 2.7% year-over-year. (Note: statewide trade groups’ monthly reports show similar modest gains; the Minnesota Realtors® September report cited a statewide median near $357,200 — also positive year-over-year).

• Inventory & Market Pace: National and local data point to growing inventory in 2025 compared with 2024. HouseCanary and other data providers reported inventory increases and rising months-of-supply nationally in September 2025, which has translated locally into somewhat longer days on market in many Minnesota neighborhoods.

• Buyer Activity & Rates: Mortgage rates eased somewhat after Federal Reserve rate adjustments in 2025, which nudged buyer activity higher in September nationally — a trend that helped accelerate existing-home sales. Expect rate movement to remain a major driver for buyer confidence into year-end.

Our Expert Take — What We Expect for Year-End & Heading into 2026

1) Inventory will continue to tick up (gradually)

After a prolonged period of extremely tight supply, sellers are slowly returning to the market. That means more choices for buyers, and at the same time it eases the heat of multiple-offer situations in many price bands. Expect pockets of tightness to remain — especially for well-priced, move-in-ready homes in desirable Twin Cities suburbs — but overall selection will be better than the manic spring markets of prior years. (Local MLS activity and national inventory reports back this up.)

2) Mortgage rates — cautiously optimistic but not guaranteed

2025 brought some rate relief compared with the summer highs: a Federal Reserve pivot and market movement helped nudge mortgage rates lower, which spurred buyer activity in the autumn. While more rate improvements are possible, buyers should remain rate-aware: small rate shifts materially change purchasing power. If rates continue to soften modestly, we’ll likely see more buyers re-enter in early 2026.

3) Types of listings you’ll see

Expect a mix:

• Well-priced turnkey homes will continue to move quickly.

• Properties needing updates or with inflated price expectations may linger longer or receive price cuts.

• Relocation and life-timing sellers (job moves, family changes) will keep listing through winter — these often produce motivated sellers and realistic negotiations.

4) How sellers should position themselves now through winter

• Price to attract attention. With inventory rising, accurate pricing is more important than ever. Overpriced homes will sit and may require later price reductions.

• Stage for comfort & light. Winter showings are emotional — buyers are buying a lifestyle. Warmth, bright lighting, and clutter-free interiors matter.

• Be flexible on showings and contingencies. A small concession (timing, minor repairs, closing credit) can win deals in a transitional market.

• Work with an agent who markets year-round. High-quality photos, virtual tours, and targeted online marketing keep your listing competitive even in quieter months.

5) How buyers should position themselves now through winter

• Get pre-approved now and lock in the best available rate you can. Being “show-ready” with financing gives you instant credibility.

• Look for motivated sellers & realistic pricing. Winter buyers can find deals or favorable terms from sellers who need to move.

• Inspect for real-world winter issues. Use winter showings to evaluate heating, insulation, snow/drainage, and roof condition — things that may be hidden in other seasons.

• Be prepared to act quickly on well-priced homes. While competition is cooler than spring, desirable homes still move fast in good condition and at fair prices.

Bottom Line

Minnesota’s market finish to 2025 looks steady — not frothy. Prices have posted modest gains, inventory is improving (which benefits buyers), and mortgage rate easing has rekindled buyer interest. That mix creates an environment where smart sellers who price and present well can still win, and prepared buyers who are financially ready can find opportunities and negotiating leverage before the typical spring surge returns.

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