The Alexandria and Detroit Lakes regions saw modest sales growth, perhaps partly due to the draw of “cabin country.” Meanwhile, Rochester showed gains in sales and listings, but prices were flat despite the momentum around the Mayo Clinic expansion. Prices rose the most in the Willmar and Fergus Falls regions. In the northwest region, Bemidji is technically the only balanced market with 5.3 months of supply, but homes took longer to sell in the Hibbing and Mankato regions. Permitting, local regulations, zoning, and development processes can vary widely across regions and so do labor markets for the building trades.
The state’s unemployment rate is around 3%, which is roughly average. There are almost twice as many job openings as workers seeking employment, meaning businesses are struggling to find labor. Our diverse economy continues to fuel housing demand, which makes the challenge of providing adequate ownership opportunities that much more critical. Minnesota’s regulatory environment can make it difficult to build new homes. Even so, because many existing homeowners are staying put, builders are finding strong demand for new homes. But high daycare costs and lack of adequate rural broadband pose unique challenges to our great state—as does tax competitiveness. While inflation is cooling, the rising cost of living is impacting Minnesotans in every neighborhood and zip code throughout the state.
Twin Cities Metro Overview
Metro home prices rose as well but at a more modest 2.7% pace. Sales were down about 12% in both the metro and state. Homes sold in 32 days in the metro versus 31 days statewide. The metro area is a slightly hotter market with 2.2 months of supply compared to 2.5 for the state. The metro has a similar shortage of homes—particularly affordable ones—to other regions across the state. While incomes are higher in the metro, so are home prices and mortgage payments. Greater Minnesota regions have some similar but also many unique challenges.