Blogs

Trends in Minnesota reflect slowing buyer demand across the country. Although sales prices continued rising in February, growth in home prices has tapered from its peak two years ago. In some areas, sellers have cut prices to entice buyers whose purchasing power has been eroded by inflation and persistently higher interest rates. Buyers who had the resources to stay in the market during this period found they had increased negotiating power and were able to close on properties they could not compete for a year ago. As spring approaches, the state of the housing market will depend on the pace of inflation, mortgage rates, and continuing job creation. Longer term, low inventories, and affordability will remain persistent challenges in Minnesota until the pace of construction increases, and down-payment assistance is more widely available.  

February year-over-year summary of key market indicators:  

In February, closed sales declined in all 13 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 22.4% year over year. The smallest declines were seen in Arrowhead at 11.7%, West Central at 16.9%, and the 7-County Twin Cities at 19.4%. The largest declines were reported in Southwest Central at 40%, Upper MN Valley, also at 40.0%, and Northwest at 46.4%. See the chart below for more details comparing closed home sales for February 2023 to February 2022.