Predicting the Future: What Can Minnesota Homebuyers Expect in Q2?

In the second quarter of 2025, the Minnesota housing market is anticipated to experience moderate growth in home prices and an increase in sales activity. Experts predict that home prices will rise between 3% and 6% during this period. Realtor.com forecasts a 6.2% increase in home prices for the Twin Cities area in 2025, while local expert David Arbit projects a 4-5% rise.

Sales activity is also expected to pick up, with the National Association of Realtors (NAR) predicting a 9% increase in existing home sales and an 11% rise in new home sales for 2025. This uptick is attributed to factors such as adjustments to mortgage rates and wage growth outpacing inflation.

Mortgage rates are projected to stabilize around 6.5% throughout the year, which may encourage both buyers and sellers to enter the market. However, housing inventory is likely to remain low, potentially leading to increased competition among buyers.

In urban areas like Minneapolis and St. Paul, demand for housing is on the rise. Median home prices in these cities increased by 4.7% and 4.3%, respectively, outpacing the overall metropolitan area's growth. This trend is partly due to more organizations calling employees back to the office, increasing the appeal of urban living.

For those considering selling their homes, spring, particularly May, is identified as the optimal time. Homes listed in late May in the Minneapolis metro area tend to sell for 2.9% more compared to other times of the year.

Overall, the Minnesota housing market in Q2 2025 is poised for moderate price increases and heightened sales activity, influenced by stable mortgage rates, low inventory, and a growing demand for urban living.

*SOURCES: Axios, Twin Cities Habitat for Humanity, Ramsey Solutions, MAR, Ameriprise Advisors, MN Department of Revenue, Bankrate, Houzeo, Reddit