Minnesota Housing Market

Learn more about the housing market in Minnesota

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Minnesota Housing Market Trends & Forecast

July 2, 2024

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Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life.   

Minnesota Housing Market Overview 

Bordering Lake Superior and situated at the northern mouth of the Mississippi River, Minnesota is known as “Land of 10,000 Lakes” for the abundance of freshwater lakes and rivers within its borders.  Minnesota thrives on a number of industries, and according to data from IBISWorld, Real Estate, Rental and Leasing is the sector that contributes the second most to its 2023 GDP behind manufacturing. An overview of the housing market in the state, therefore, is very worthwhile. 

At the beginning of the year, experts predicted that the housing market in Minnesota would continue to see higher house prices, though interest rates across the state would settle and the number of potential buyers would increase. As of April 2024, many of these predictions have proven to be correct, and data from different sources point to trends that are expected to continue throughout the rest of the year. According to Geri Theis, President of Minnesota Realtors, the state is facing low inventory challenges which are impacting housing prices and the competitive nature of the market. 

In fact, historically high interest rates have seen a significant decrease across the country. The national average 30-year fixed mortgage rate in late 2023 approached 8% but settled in April 2024 to just below 7%. As we will discuss later in this article, a similar trend can be seen in the Minnesota housing market, reflecting easing inflation that is bound to benefit a growing demographic of prospective homeowners across the country. 

Minnesota Market Trends  

To understand the Minnesota real estate market, it’s important to keep up with trends. Let’s look at some key ones in Minnesota: The increase in closed sales indicates a competitive market, with more homes being sold within a particular time frame. The rise in pending sales is affecting inventory levels and housing prices, making it challenging for both buyers and sellers. Current trends indicate a seller’s market with limited options for buyers and rising home prices. 

Note: These statistics are based on Redfin’s monthly housing data from April 2024. 

Median Home Price 

The median sale price of a home in Minnesota as of April 2024 was $354,900 according to Redfin’s monthly housing market data. This is an increase of 3.9% from April 2023, accurately reflecting predictions of continually increasing house prices in the state. In Minneapolis, the most populous city in the state, the median price is slightly lower at $340,000, but also experienced an increase of 2.2% from April 2023. However, appreciation is not consistent in every major city in Minnesota. In Saint Paul, the state capital, prices have decreased from April 2023 to $300,000. 

The median sales price varies significantly across different regions within Minnesota, highlighting the diversity in home prices. It is important to remember that statewide trends are aggregates from a diverse array of housing markets within the state. 

Number of Homes Sold in April 2024  

6,329 homes were sold in Minnesota in April 2024, which is a 12.2% increase from the previous year. This number can be expected to increase throughout the summer when home sales are much more common. Though this is a significant increase from the previous year, it falls short of peaks that were seen in the summers of 2021 and 2022. 

Home buyers are facing challenges due to low inventory and intense competition, often paying well above the list price to secure a property. Higher interest rates are also contributing to the low inventory, as owners with lower rates are hesitant to sell. 

However, it is important to keep in mind that nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%. 

Median Days on Market (DOM)  

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. In such markets, homes often sell above the list price due to the competition. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage. 

The median DOM in Minnesota in April 2024 was 22 days, which is an increase from 18 in April 2023. This means that on average, listings spend under a month on the market before they are purchased. This increase from the past year potentially points to a market that is increasingly favoring buyers over sellers. 

New Supply and Pending Sales Statistics

In April 2024, there were about 5.9 new residential construction permits per 1,000 people in Minnesota. This statistic, which points to the rate of new housing supply, is slightly above the national average. Increased housing supply is predicted to ease housing prices and increase affordability in many markets across the U.S. in 2024.   

Property Tax Rate 

According to Rocket Mortgage, the average property tax rate in Minnesota is 1.1%. This is a higher average than 32 other states in the country, and its average annual property tax is around $2,484.78. However, it is important to keep in mind that this statistic reflects the average of a lot of data in a populous state with significant geographic and economic diversity. Tax rates are likely to vary depending on the value of a home and its location in the state.  

Foreclosure Rate in Q1 of 2024 

In the first quarter of 2024, 1 in every 2,169 homes in Minnesota experienced a foreclosure filing, according to recent data from ATTOM. This is just about consistent with the national average, and Minnesota is ranked 25th—right in the middle—for foreclosure rates nationwide.   

Hottest Local Markets in Minnesota   

1. Minneapolis  

By a significant margin, Minneapolis is the most populous city in Minnesota. Situated in the eastern part of the state near the state’s border to Wisconsin, Redfin identifies Minneapolis as a highly competitive market. As previously mentioned in this article, median prices have increased 2.2% from April 2023 to 340,000. Its DOM of 18 is also lower than the statewide average, suggesting a competitive seller’s market. Some of the most popular neighborhoods in Minneapolis are Linden Hills, Fulton, and Downtown West.  

2. Saint Paul 

Behind Minneapolis, the capitol city Saint Paul is the second most populated city in Minnesota. Though it is directly to the east of Minneapolis, the details of its housing market are a little different. Its median home price is lower at $300,000, and its DOM of 16 suggests that its market may be more competitive and more of a seller’s market than Minneapolis. Some of the most popular neighborhoods in Saint Paul are Highland, Payne – Phalen, and Downtown St. Paul.   

3. Bloomington 

Located directly south of Minneapolis and southwest of Saint Paul, Bloomington is significantly less populous than either city. However, its housing market is still considerably competitive. Its DOM of 14 is lower than either city, and its median home prices in April 2024 are also higher at $370,000, an increase of 0.7% from April 2023. Some of the most popular neighborhoods in Bloomington are South Loop and Normandale Highlands.   

Factors Impacting the Minnesota Housing Market  

A holistic view of Minnesota’s housing market requires a basic understanding of the main economic drivers affecting the market. Buyers are willing to pay significantly above the asking price to secure a home due to high demand and low inventory. Let’s take a look at a few critical ones below: 

Minnesota’s robust economy and affordable cost of living continue to attract buyers to the housing market. The state’s strong job market and friendly tax policies also play a significant role in maintaining a stable housing market. 

When the Minnesota housing market is compared to other states, the imbalance between the number of buyers and the supply of homes becomes evident. The impact of soaring interest rates on buyer activity is another critical factor, making it advisable to purchase a house before mortgage rates stabilize in 2024. 

Mortgage Rates 

Mortgage rates are a common cause of concern for would-be homeowners across the U.S. in 2024. As previously mentioned, national averages have dipped from last fall’s record highs, and Minnesota is no different. According to Zillow, the housing market Minnesota is currently facing sees 30-year fixed mortgage rates down to an average of 6.38%. This accurately reflects the prediction for the year that interest rates would decrease but stabilize above 6%.   

Inflation and Cost of Living 

Mortgage rates are tied to inflation, another massive contributing factor to the affordability of housing and the state of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in Minnesota. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income.   

Population Changes and Demographics 

A changing population can also have implications for the housing market. According to the U.S. Bureau of Labor Statistics, the unemployment rate in Minnesota is one of the lowest in the country. Its unemployment rate of 2.6% makes it the fifth lowest rate in the country. This low unemployment rate suggests a thriving and healthy economy that is bound to help the housing market in the state.   

Minnesota Housing Market Forecast 2024  

As previously mentioned, experts considered the appreciating housing market Minnesota faced in 2023 and predicted that prices would continue to rise throughout the year. The expected rise in median sales price is seen as a favorable condition for sellers and a sign of growth in the real estate sector. This has proven true over the course of the year, though steadying interest rates and a hope for increased supply in the housing market signified by an increase in sales may indicate a slowing growth in prices. 

Likelihood of Minnesota Housing Market Crash  

Though the way prices in the Minnesota housing market have continued to surge may seem concerning, experts have asserted that a crash is significantly unlikely. There are many reasons for this, including a very healthy economy signified by a low unemployment rate, interest rates that have significantly settled from last year, and a growing number of people who are moving to the state. Minnesota’s strong job market and friendly tax policies continue to attract buyers, making a housing market crash unlikely. The market seems poised to continue appreciating, but it is unlikely to reach any significant or concerning threshold in the near future. 

Forecast for the U.S. Housing Market  

Now that we’ve looked at Minnesota’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years?   

The United States’ current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9.  

We’re currently in a seller’s market with buyers looking at continued rising house prices. The same trend can be seen with renters. Housing continues to appreciate, in general.   

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get.   

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth.   

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.   

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.  

Minnesota Rental Market  

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.   

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.   

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.    

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year.   

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.  

This short summary leads directly into Minnesota’s current rental market. Below are just a few of the current trends for Minnesota’s rental market based on data pulled from Zillow:  

Minnesota Rental Market Key Trends  

  • Median rent: $1,525
  • Month-over-month rent charge: -$10  
  • Year-over-year rent charge: +$25  
  • Available rentals: 6,393


Minnesota is a large state, and different areas are bound to be experiencing diverse housing markets. However, as a whole, 2024 has seen many significant indicators of a stabilizing and healthy housing market that buyers and sellers alike should watch closely. Experts and analysts will continue to monitor this market, as well as nationwide factors like interest rates and new construction.   

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