How Minnesota’s Housing Market Is Setting Up for 2026

By Chad & Sara Huebener

Chad and Sara are Executive Circle sales associates at Edina Realty and are committed to serving clients in a manner that is ethical and respects confidentiality without giving up the aggressiveness and tenacity it takes to get homes sold.

The new year always brings fresh questions about real estate, but the clearest answers come from understanding how the market actually finished the year before. Now that January has arrived, the full 2025 data has been compiled and finalized, which gives us a reliable snapshot of where the market truly landed.

This is the point when real estate numbers stop shifting and start telling a clear story that can be used to guide decisions in 2026.

Why does last year’s data matter now? Real estate data is not fully usable until the year closes and associations have time to clean and organize it. January marks that turning point. Looking at end-of-year numbers now allows buyers and sellers to move forward with confidence instead of relying on incomplete trends or headlines pulled from earlier months. These numbers help set expectations for pricing, timing, and competition as the new year begins.

Home prices finished the year on solid ground. One of the biggest takeaways from 2025 is how steady price growth remained. Across Minnesota, home values appreciated by just under 3%, coming in around 2.9% statewide, with similar results in the metro area. This level of appreciation is considered healthy and sustainable.

In earlier years, appreciation reached closer to 10%. While that benefited sellers at the time, it created affordability challenges for buyers and put long-term pressure on the market. The current pace supports stability, which helps both buyers and sellers plan without chasing or fearing sudden price swings.

Inventory continues to favor sellers. Inventory remains tight, and this continues to shape the market. Months of supply are hovering around 2.4 months. Any market with fewer than five months of supply is considered a seller’s market, because homes would sell quickly if no new listings were added. At 2.4 months, sellers still hold a clear advantage.

A true buyer’s market has not appeared in quite some time. A balanced market typically sits closer to five or six months of supply, and current levels are well below that threshold. This means competition remains a factor, especially for well-priced homes.

Buyers are seeing some relief on rates. Buyers are getting modest relief as mortgage rates have come down. Rates are now hovering just below 6% on average, which is lower than what buyers experienced through much of the past year. While rates are still higher than historic lows, this shift creates more breathing room as buyers move toward the spring market.

Combined with slower price growth, this change helps buyers approach the market with more predictability when planning monthly payments and budgets.

Homes are taking longer to sell. While the market still favors sellers, expectations around timing have adjusted. Homes are no longer moving at the pace seen during peak years. In the Twin Cities, the average days on market sit around 50 days. Statewide, that number is closer to 56 days.

This means most homes are taking just under two months from listing to accepted offer. Demand is still present, but pricing correctly and preparing a home properly now play a larger role in how quickly it sells.

Seasonal patterns still apply. In Minnesota and across the Midwest, real estate follows a familiar seasonal rhythm. While year-end data is reviewed in January, market activity typically begins to build in early February. This is when the spring market starts to take shape, assuming weather conditions allow. Historically, this is when both buyers and sellers become more active after the winter slowdown.

Planning early creates more options. For anyone thinking about making a move this year, early preparation matters. Conversations around financing, affordability, and equity tend to be more productive when they happen before competition increases. New lending tools are also becoming more common, which can help buyers and homeowners navigate today’s market more effectively.

Understanding the market doesn’t have to be complicated. When expectations are grounded in real data and timing is planned carefully, buyers and sellers can make confident decisions without unnecessary stress.

If you’re thinking about buying or selling this year and have questions about pricing, timing, or next steps, feel free to call or text us at 952-212-3597 or email us at ChadandSara@edinarealty.com. We’re happy to help you understand your options and determine the right strategy for your situation.