Local housing market status and buying tips (2025)

Local housing market status and buying tips (2025)
By Jake Spitzack | Staff Writer | July 2025

According to recent data from the St. Paul and Minneapolis Area Association of Realtors, the number of home sales in the Twin Cities metro increased 1.8% in 2024 despite a thorny trifecta of rising prices, high mortgage rates and low inventory. It should be noted that 2023 proved to be a low point for home sales in the past five years. Nonetheless, the new data offer some key indicators about the current market.

Inventory levels remain at just two months’ supply, whereas a healthy market typically has 4-6 months. Overall, this means the market remains in sellers’ hands and they can expect multiple bids in relatively quick fashion. In 2024, the median sales price statewide rose 3.9% to $345,000 (3.3% in the metro to $380,000), and sellers received 97.9% of their asking price. Those prices are about 25% higher than just four years earlier.

According to Freddie Mac, the average 30-year mortgage rate hit a 23-year high in 2023 and was down just a hair in 2024, from 6.8% to 6.7%. It’s estimated that mortgage payments (after a 10% down payment) for a median priced home in the state have risen from $1,450 to $2,500 since 2020. Sellers who are downsizing can, in fact, find themselves making higher monthly payments on their smaller home.

New listings in 2024 were up 6.4% statewide and 8.2% in the metro, and average days on the market climbed 10.5% to 42 days. Single family sales rose 3.7%, condo sales fell 7.1% and townhome sales dropped 2.4%. Preowned home sales were up 1.9% while new construction sales dipped 0.4%. Sales under $300,000 were down 8.5%, while sales over $1 million jumped 12.3% – the highest increase on record. About 17.5% of metro sales, many over $1 million, were purchased in cash and not financed – the highest number since 2013. Luxury home buyers are less rate-sensitive, which is the primary reason for more activity among those properties.

The cost of rental properties in St. Paul has increased since April last year. According to a recent report by HousingLink, median rent for 1-bedroom units increased 1%, to $1,115; 2-bedroom units increased 5%, to $1,450; and 3-bedroom units increased 1%, to $1,843. Estimated monthly income required to rent a home is $2,788 for a 1-bedroom, $3,625 for a 2-bedroom and $4,608 for a 3-bedroom.

“Sellers did have to be more patient, but not overly so, as they were still in a relatively favorable position,” said SPAAR president Jennifer Livingston in a statement. “Buyers who wrote strong, clean offers right out of the gate tended to be successful.”

Here’s how the market changed in the St. Paul Voice distribution area over the past year. Information is through April 2025.

• Median sales price on the West Side increased by 6.1%, from $284,990 to $302,500. Time on the market increased 34.4%, from 32 to 43 days. Supply of inventory increased from 0.9 to 1.3 months.
• Median sales price in downtown St. Paul increased 45.1%, from $210,250 to $305,000. Time on the market increased 4.1%, from 147 to 153 days. Supply increased from 6.8 to 11.9 months.
• Median sales price in West St. Paul increased 1.5%, from $340,000 to $345,000. Time on market increased from 21 to 38 days. Supply of inventory increased from 1.6 to 1.9 months.
• Median sales price in South St. Paul increased by 5.7%, from $280,000 to $296,000. Time on the market decreased from 37 to 23 days. Supply of inventory remained at 1.2 months.
• Median sales price in Mendota Heights decreased by a whopping 28.6%, from $734,961 to $525,000. Days on the market increased from 78 to 83 days. Supply of inventory increased from 2.4 to 2.8 months.

St. Paul expands homebuyer assistance programs
The City of St. Paul is accepting applications for its Down payment Assistance programs (DPA), which are set to award a total of $2 million to eligible homebuyers for 15-year deferred term loans at 0% interest to use toward the purchase of a home in St. Paul. It also expanded the Inheritance Fund program to include descendants of the West Side Flats, a neighborhood that was demolished in the 1960s to build a flood wall and the Riverview Industrial Park. The Inheritance Fund was first enacted in 2023 to provide financial homebuying assistance for descendants of St. Paul’s Rondo community.

The DPA program offers up to $40,000 for residents who meet income and asset limit qualifications. Funds can be used toward a downpayment, closing costs, or to buydown interest rate. Eligible applicants descended from the Rondo and West Side Flats communities can receive between $50,000 and $110,000 in total down payment assistance. First-generation homebuyers may also qualify for an additional $10,000 for a maximum award of $50,000.
To begin the application process, obtain a mortgage preapproval with a loan officer of your choosing, then complete the form at stpaul.gov/dpa.

Buying housing in today’s market

While the real estate market has been challenging for buyers over the last several years, strategies exist to help buyers find a home that suits their needs and budgets. While no one can predict if or when the real estate market might be less challenging, the following tips can help prospective homebuyers navigate the process and achieve their dream of homeownership.

Ready your finances – It’s important to get your financial affairs in order before shopping for a house. This includes analyzing your budget and getting preapproved for a mortgage from a lending institution. Organizations such as the Neighborhood Economic Development Alliance (NEDA), a St. Paul-based nonprofit, can help. They offer HUD-approved home purchase counseling free of charge and provide information on a variety of loan programs. An adviser will help you understand the process from start to finish, including a personalized, full credit report review to help identify potential barriers. They also offer Home Stretch homebuyer workshops that walk you step-by-step through the entire process, offer information on down payment and closing cost assistance programs, and give you the opportunity to ask questions of lenders, real estate agents, home inspectors and other industry professionals. For more information, visit nedahome.org or call 651-292-0131.

Minnesota Housing, the state’s housing finance agency, can help you understand your financing options and get you in touch with reputable lenders. They offer a variety of loan programs for first-time and repeat homebuyers, and a refinancing loan program to help make owning a home more affordable. Additionally, they offer down payment and closing cost loan programs totaling up to $18,000 in available loans for eligible borrowers. For more information, visit mnhousing.gov or call 651-296-7608.

Hire a real estate agent – A professional real estate agent will provide expert advice on the housing market and homebuying process, ensuring you don’t pay too much for a home or purchase a problem property. The St. Paul Area Association of Realtors offers a 7-point checklist on how to work with an agent and what to expect during the homebuying process. You can also learn more about home sales activity in your local area at spaar.com.

Secure a mortgage – Whether you’re looking to buy, build or refinance your home, an experienced mortgage professional can help. They can tell you about the wide variety of loan options available, from traditional 15- and 30-year mortgages to VA loans and adjustable-rate mortgages, and also inform you of current interest rates, provide a pre-approval letter and assist with refinance analysis.

Insurance – Once you find a home, it’s important to secure adequate insurance to protect your investment and personal valuables from fires, storms and other accidents. You may work with an independent agent or a captive agent. Independent agents can sell policies from many different companies. Captive agents sell insurance for only one company. Both types of agents represent insurance companies and receive a commission from the insurance company for the sale of its policies. When evaluating your options, make sure the agent and insurance company are licensed in your state.

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