Local housing market update

By Jake Spitzack | Staff Writer | June 2026

First-time homebuyers are still facing the biggest hurdles in today’s housing market but conditions for sellers have also cooled somewhat compared to recent years, when homes were flying off the market in less than a month. According to the most recent data from the St. Paul and Minneapolis Area Association of Realtors, median home prices statewide this spring ticked up 1.4% to $350,000 and held steady at $380,000 in the metro, and nearly all sellers (97.6%) are getting their asking price. Inventory levels remain low, making for a seller’s market and keeping overall home prices high and sales fast. However, time on the market rose from 42 to 70 days, indicating some homebuyers are hesitant to pull the trigger.

High mortgage rates continue to be a concern. They dropped just below 6% earlier this year then shot up to 6.64% in February following the start of the war with Iran. This, coupled with rising inflation and energy prices, is keeping some buyers out of the market and making others refrain from bidding wars.

“The fact that mortgage rates touched [dropped to] 5.9% in February – a key psychological level for consumers – makes the higher rates arising from the Iran conflict that much more frustrating,” said Danielle Bickham Pelton, president of the St. Paul Area Association of Realtors, in a recent report. “The hope is that these pressures will ease and rates will continue to soften, which would be ideal for the spring and summer market.”

According to Freddie Mac, the average 30-year mortgage rate at press time was 6.36%, down from 6.76% in April last year. Rates in 2023 were 7.79%, the highest since 2000 when they hit 8.64%. It’s estimated that today’s mortgage payments (after a 10% downpayment) for a median-priced home in the Twin Cities metro of $380,000 is $2,693, a sharp increase from $1,721 in 2019 when the median home price was $280,000 and rates hovered at 4%. People who are downsizing can in some cases find themselves making higher monthly payments on a smaller home, although equity from a sale can offset that increase.

Here’s how the market changed in the St. Paul Voice distribution area over the past year. Data is through March.

• West Side – Median sales price increased from $289,000 to $313,350. Time on the market increased from 46 to 62 days. Supply of inventory increased from 1.7 to 2.3 months.
• Downtown St. Paul – Median sales price decreased from $247,500 to $169,000. Time on the market increased from 125 to 207 days. Supply increased from 9.2 to 13.6 months.
• West St. Paul – Median sales price increased from $310,000 to $315,000. Time on the market increased from 45 to 63 days. Supply of inventory decreased from 1.7 to 1.5 months.
• Mendota Heights – Median sales price increased from $520,500 to $525,000. Time on the market increased from 20 to 38 days. Supply of inventory decreased from 2.9 to 1.8 months.
• South St. Paul – Median sales price decreased from $300,000 to $296,050. Time on the market decreased from 32 to 22 days. Supply of inventory increased from 1 to 1.1 months.

Rent remains stable
The cost of rental properties in St. Paul hasn’t changed substantially in the last year. According to a recent report by HousingLink, median rent for 1-bedroom units increased 1% to $1,095; 2-bedroom units decreased 1% to $1,425; and 3-bedroom units increased 4% to $1,925. Estimated monthly income required to rent a home is $2,738 for a 1-bedroom, $3,563 for a 2-bedroom and $4,813 for a 3-bedroom.

Buying a home 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 advice on the housing market and homebuying process to help you avoid paying too much for a home or purchasing 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 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, who can sell policies from many different companies, or an agent that works specifically for one company. Both types of agents represent insurance companies and receive a commission from the insurance company. When evaluating your options, make sure the agent and insurance company are licensed in Minnesota.

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